What is an adversary proceeding?
An adversary proceeding is a lawsuit that relates to a bankruptcy case, but it is not part of the main bankruptcy proceeding. They usually involve some combination of the Debtor, the Trustee, and/or creditors of the Debtor’s estate. Examples of adversary proceedings include: objections to the Debtor’s discharge; disputes over the amount, validity, and priority of liens; proceedings involving requests for turnover and for injunctive relief; disputes over ownership of property; and other proceedings that in any way touch on or impact the bankruptcy case.
Adversary proceedings move along rapidly, and it is common for a case to be resolved within 6 months. This helps facilitate a speedy resolution of the bankruptcy case, and often puts an end to litigation that has been drug out in state court for years.