An adversary court proceeding in personal bankruptcy is a different suit submitted within the bankruptcy proceeding. Like the majority of suits, it begins when someone (the lender, the bankruptcy trustee, or you) files a grievance. Many bankruptcies undergo to completion as well as a discharge without any adversary proceedings. Not so in others.
A lender or the personal bankruptcy trustee might bring an adversary continuing to challenge the dischargeability of a specific financial obligation– affirming that you incurred it through fraud. Or the trustee could seek to gain back residential or commercial property that you transferred or offered to somebody else prior to your personal bankruptcy. You can bring an adversary proceeding too. In several districts, you can just rid yourself of younger liens on real estate through an adversary proceeding.
The different types of common adversary proceedings are:
Fraudulent transfers. When a debtor transfers money out of the bankruptcy estate with the intent to shield it from the creditors.
Preferential transfers. When you give someone money or other goods in preference over your creditors.
Lien stripping. If you file a Chapter 13 bankruptcy you can use this to strip junior liens from your house
Determination Dischargeability of debt. A creditor can file an adversary complaint requesting that the court not discharge its debt because it alleges that you incurred the debt fraudulently, either by actual fraud or constructive fraud.
Sale of property jointly owned by the debtor. If the debtor listed property that is owned by someone else.
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