Lawsuits in Bankruptcy Cases
What Debtors Need to Know About Adversary Proceedings
Assumed Abuse If a debt was acquired very shortly before the debtor filed for bankruptcy, the creditor may file an adversary proceeding. This is an example of assumed abuse, in which the debtor may have intentionally acquired the debt with the goal of filing for bankruptcy to avoid paying it back. Usually, debts acquired over 90 days prior to filing for bankruptcy aren’t suspect. Adversary proceedings almost never come up in bankruptcy cases, but debtors and creditors alike need to be aware of them. This is why it’s so important to work with a bankruptcy attorney who knows how to handle an adversary proceeding filed against you. Matthew Dunaway has decades of experience navigating the complicated waters of bankruptcy. Call 205.705.3590 and talk to an experienced attorney about your financial situation today.
While stressful, bankruptcy cases have the benefit of not being overly litigated for the most part. In certain circumstances, a lawsuit may be filed within a bankruptcy case. These are called adversary proceedings, and they can be filed by the debtor, the creditor, or a bankruptcy trustee. Adversary proceedings are unusual in bankruptcy cases, but they can happen. Here are the most common reasons why an adversary proceeding might come up during a bankruptcy case. Automatic Stay Violation When you file for bankruptcy, a court order will issue an automatic stay. This means all civil lawsuits filed against you or collection action taken against your property must immediately stop. If a creditor violates the automatic stay, for example, if they continue to contact the debtor to collect the debt, the debtor can file an adversary proceeding against them.
Debts Are Nondischargeable There are some debts, like taxes or student loans, that cannot be discharged with bankruptcy. Creditors may file an adversary proceeding if they believe their debt is nondischargeable. The court will look into the debt and determine if it can be wiped out with bankruptcy.
RECIPE:
Leftover Candy Snack Mix
This recipe from Momofuku Milk Bar chef and “Master Chef” judge Christina Tosi makes great use of those extra Halloween goodies. It’s a quick and easy way to both elevate and get rid of unwanted leftovers.
1 Corinthians 6:12
“‘I have the right to do anything,’ you say — but
INGREDIENTS:
• • • • • •
2 cups mini pretzels, coarsely broken
1/4 cup light brown sugar 2 tbsp granulated sugar 1/3 cup dry milk powder 6 tbsp unsalted butter, melted
not everything is beneficial. ‘I have the right to do anything’ — but I will not be mastered by anything.”
12 oz mini candy bars, such as Snickers, chopped into 1/2-inch pieces
DIRECTIONS:
1. Heat oven to 275 F. 2. In a large mixing bowl, fold together pretzels, sugars, milk powder, and butter. 3. Spread mixture on a baking sheet lined with parchment paper and bake for 20 minutes. 4. Let cool for at least 30 minutes and mix in candy bar pieces before serving.
Inspired by Food & Wine Magazine
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