View random article

What Is an Adversary Proceeding?

An adversary proceeding occurs when there are misunderstandings and arguments between parties or individuals that focus on bankruptcy. Filing an adversary proceeding on a bankruptcy case could vary depending on the people involved. Adversary proceedings may be filed by a creditor, a chapter trustee, or a debtor.

A creditor could argue in the proceeding that the debt that one is obliged to pay to him or her should not be taken away despite the bankruptcy situation since there was a deal behind it and contracts were even signed. While on the other hand, a chapter trustee could as well file an adversary proceeding in a way that opportunity is given to them to address different issues and state his or her side regarding tasks not done accurately, properly, dishonestly and not filed on time.

Another argument on this proceeding could be if the trustee would want to undo the transfer of a property that was already decided upon. Lastly, a debtor could use the proceeding to take it against the creditor regarding damages that he or she would want to recover. The debtor could take such action as his or her rights were violated by the creditor.

An adversary proceeding is not always successful. It should be understood as well that not because it was filed, it already presents good and reasonable arguments. There’s still no assurance that the case would win. It is a fact that attorneys are essential and beneficial to every case but the final decision would still come from the judge as he is the one responsible to decide on who’s guilty or not.

Featured in Finance