Can a Bankruptcy Case Become Adversarial?

When you think of a legal case being filed in court, you might think of two or more parties arguing against one another in front of a judge. Bankruptcy is a unique type of legal matter, as it often does not involve any adversarial issues. In fact, many people who file for bankruptcy never even have to appear in court. The required appearance is at the meeting of creditors, also called the 341 hearing, and in most cases, no creditors even attend. 

While most bankruptcy cases go smoothly without any adversary proceedings, there is the possibility that parties might challenge part of your bankruptcy case. It is always important to have an experienced Indiana bankruptcy attorney representing you in case anything out of the ordinary happens in your case. 

Motions to Lift the Automatic Stay

When you file your case, an automatic stay goes into effect that halts all collection efforts and legal action by creditors. This stay should last the entire time your bankruptcy case is pending, though sometimes, certain creditors file motions with the court to lift the automatic stay as it applies to their specific debts. This is particularly common by mortgage lenders that want to proceed with a foreclosure case. You should have a bankruptcy attorney who can properly respond to such motions and argue to keep the stay in place when appropriate.

Unwinding Transfers of Property

Some people might be tempted to transfer assets and property in the time leading up to a Chapter 7 bankruptcy case in an attempt to protect property from the bankruptcy trustee. These transfers might be inadvertently improper, or they might be suspected as fraudulent or prioritizing creditors without the oversight of the bankruptcy trustee. A trustee might seek to reclaim assets and property that were transferred improperly. 

Objecting to Exemptions

In a Chapter 7 case, filers often rely on exemptions to protect property and assets as much as possible. Bankruptcy trustees will review how exemptions were applied and might object if they believe certain property should not be protected from liquidation. If a bankruptcy trustee files objections with the court, you want an experienced attorney defending exemptions and the protection of your property. 

Objecting to the Discharge of Certain Debts

A successful bankruptcy case ends with the discharge of your qualified debts, and obstacles to achieving this goal can be concerning. Either the creditor or the bankruptcy trustee can object to the discharge of certain debts – or even challenge a discharge in its entirety. A trustee might object to discharge if they believe there might be bankruptcy fraud or abuse in the works, or if they think you should be ineligible for a discharge for another reason. Your lawyer will need to provide evidence in support of discharge in this situation. 

Learn How a Northwest Indiana Bankruptcy Attorney Can Help

If you would like to discuss a possible bankruptcy case Whitten & Whitten is ready to help. Contact us to learn about your options right away.