Adversary proceedings are lawsuits filed within the context of a bankruptcy in Keller, TX. They can be filed by trustees, debtors or creditors, and the person bringing the proceeding typically does so to achieve a purpose such as recovering property or seeking redress for legal violations. In this article, readers can learn what happens during an adversary proceeding.
When Creditors File
When creditors file adversary proceedings, it is usually to avoid the discharge of certain debts. A debt can be declared non-dischargeable if it meets certain conditions. The most likely examples are debts obtained fraudulently or immediately before the filing. In most instances, creditors must file adversary proceedings to object to a discharge.
A trustee can file to ask the court to deny a bankruptcy discharge. If a person lies on their bankruptcy documents, hides assets, or otherwise tries to manipulate the system, a trustee may argue they should not receive a discharge. Additionally, a trustee can file adversary proceedings to recover fraudulent transfers and preferential payments.
When Debtors File
A debtor may file adversary proceedings in their own bankruptcy case. Most debtors file to get redress against creditors for violations of an automatic stay. In certain areas, debtors may have to file adversary proceedings if they want to remove a second mortgage through the process of lien stripping.
When Proceedings Are Filed
To file adversary proceedings during bankruptcy in Keller, TX, one must file a formal complaint and have it served on a defendant. Complaints must set forth facts relevant to the case, and they must specify the requested relief. Depending on jurisdictional law, the person has only a limited time to respond to a complaint, and failure to respond typically results in the issuance of a default judgment.
Defending Against Adversary Proceedings
To defend against adversary proceedings, one must familiarize themselves with local and federal rules. If creditors object to a discharge and the debt is relatively small, they may be able to settle out of court. However, if the proceedings involve serious matters, a trial may be necessary. In these cases, it is best to retain legal representation. Those facing adversary proceedings should visit to talk to a bankruptcy attorney who regularly handles such cases and can inform the client of their legal options.
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