n adversary proceeding is a lawsuit that is part of a bankruptcy case. Most cases do not involve an adversary proceeding because adversary proceedings are not necessary to obtain a discharge. A creditor can file an adversary proceeding against a debtor to attempt to exclude its debt out from the debtor’s discharge. If the creditor wins the case, then that debt will not be discharged and collection efforts can continue post bankruptcy discharge. Most experienced bankruptcy lawyers can spot most potential adversary proceedings before a case is filed. The reason for this is that the Bankruptcy Code enumerates only certain types of claims that entitle a creditor to object to its claim from being subjected to inclusion in a debtor’s discharge.
The most common non-dischargeability lawsuits are ones that are brought because of the debtor’s alleged fraud, breach of fiduciary duty or willful and mallicous conduct. The possibility that that a debt can survive the discharge is complicated and can involve some strategic planning when considering bankruptcy. As such, it is very important to seek competent advice from counsel such as one of the attorneys at Arboleda Brechner.