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BANKRUPTCY DISPUTES

Bankruptcy Disputes & Litigation

Disputes often arise in the bankruptcy setting: a debt was acquired by fraud and is not dischargeable; a creditor could try to collect a debt after the bankruptcy case is finished; or, a trustee may try to recover a piece of property that the debtor is hiding. Disputes that arise in a bankruptcy may require a separate lawsuit within the case, called an adversary proceeding.

Bankruptcy Litigation:
The Adversary Proceeding

An adversary proceeding in bankruptcy is a separate lawsuit filed within the bankruptcy case. Like most lawsuits, it starts when someone (a creditor, the bankruptcy trustee, or you) files a complaint. Many bankruptcies go through to completion and discharge without any adversary proceedings. But not so in others.

Having an attorney that is not experienced with the intricacies of bankruptcy and the rules of bankruptcy procedure can have serious consequences on a debtor's ability to obtain a discharge, and on a creditor's ability to collect a debt. Our attorneys have been representing both debtors and creditors before the United States Bankruptcy Court, since 2001. If you are a creditor that has received a notice of bankruptcy, or if you have received a demand letter from a bankruptcy trustee, you have a short period of time to act. Protect your interest and contact us today.

Types of Bankruptcy Litigation

Initiated by the Trustee against Creditors or Other Interested Parties:
  1. Objection to Claims - The trustee can challenge a creditor’s right to payment on a proof of claim.
  2. Recovering Property - The trustee has broad powers to take back some assets. For instance, the trustee can reclaim money paid to a particular creditor shortly before the bankruptcy or recover property that was fraudulently transferred to someone else immediately before the bankruptcy was filed.
Between Debtor and Creditors:
  1. Dischargeability - Some debts, such as those obtained by fraud, are nondischargeable (they don’t go away in bankruptcy).
  2. Objection to discharge - A creditor can challenge the debtor’s right to their entire discharge if the debtor has defrauded the court, such as hiding assets.
  3. Claims Debtors can challenge a creditor’s right to payment on a proof of claim (the form a creditor must submit before receiving payment).
  4. Automatic stay or discharge violations - A creditor is not allowed to collect a debt after the debtor obtains a discharge, nor can a creditor attempt to collect a debt after the case is filed without first obtaining permission from the court.
Initiated by the Trustee against the Debtor:
  1. General discharge - If the Trustee uncovers bankruptcy fraud, he can challenge a debtor’s right to a discharge.
  2. Exemptions and other property issues - The trustee can litigate the debtor’s right to claim an exemption (a debtor can protect property that is exempt under the law).

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