The topic of this article is a brief discussion of adversary proceedings in United States Bankruptcy Court. An adversary proceeding is a lawsuit filed within a bankruptcy case. It is an action commenced by a plaintiff filing a complaint against one or more defendants. An adversary proceeding resembles a typical civil case from state court. The plaintiff is the person, partnership or corporation initiating the lawsuit.
Two of the most common adversary proceedings are a complaint to determine the dischargeability of a debt under Title 11 United States Code ("U.S.C.") Section 523[c] and a complaint to deny the Debtor a discharge under Title 11 U.S.C. Section 727.
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A complaint to determine the dischargeability of a debt is generally filed for one of two reasons; the debt is based on fraud or false representations, or the debt is based on a willful or malicious injury to another.
The deadline to file a complaint to determine the dischargeability of a debt under Title 11 U.S.C. Section 523[c] is no later than sixty (60) days after the date first set for the meeting of creditors. See Federal Rule of Bankruptcy Procedure 4007[c] ("FRBP"). If the complaint is not timely filed it is barred unless a request for extension of time is granted by the bankruptcy court before the deadline.
A complaint to deny the Debtor a discharge is less common as it requests that the bankruptcy court deny the Debtor a discharge, if the request is granted the Debtor is denied a discharge and all of the debts listed on the bankruptcy petition are then declared non-dischargeable. This complaint is generally used when a creditor cannot file a complaint to determine the dischargeability of a debt because the debt is not based on any of the reasons specified in Title 11 U.S.C. Section 523.
The deadline to file a complaint to deny the Debtor a discharge under Title 11 U.S.C. Section 727 is also no later than sixty (60) days after the date first set for the meeting of creditors. See FRBP 4004(a). If the complaint is not timely filed it is barred unless a request for extension of time is granted by the bankruptcy court before the deadline.
Once the summons and complaint are filed they must be served on the defendant(s) within 120 days from the date the complaint was filed or the case will be subject to dismissal. See Federal Rules of Civil Procedure 4(m).
The defendant(s) must respond to the complaint within thirty (30) days after being served with the summons and complaint unless a different date is specified by the court. See FRBP 7012(a).
If the defendant(s) do not respond to the complaint by the date set forth in the summons they are in default. The Plaintiff can then obtain a default judgment for the relief requested in the complaint.
If the defendant(s) do answer the complaint then discovery is permitted pursuant to the Federal Rules of Civil Procedure. The Bankruptcy Rules specifically allow the same type of discovery in adversary proceedings as in a civil case so written interrogatories, requests for admission, and requests for production of documents may all be used in addition to depositions.
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Stan Burman
Copyright 2012 Stan Burman. All rights reserved.
DISCLAIMER:
Please note that the author of this article, Stan Burman is NOT an attorney and as such is unable to provide any specific legal advice. The author is NOT engaged in providing any legal, financial, or other professional services, and any information contained in this article is NOT intended to constitute legal advice.
These materials and information contained in this article have been prepared by Stan Burman for informational purposes only and are not legal advice. Transmission of the information contained in this article is not intended to create, and receipt does not constitute, any business relationship between the sender and receiver. Any readers should not act upon this information without seeking professional counsel.
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