How does an adversary proceeding in bankruptcy work, step by step?

What has to go through an adversary proceeding?

Bankruptcy Rule 7001 lists the matters that are adversary proceedings. They include a proceeding to recover money or property, to determine the validity, priority or extent of a lien, to revoke or object to a discharge, to determine whether a debt is dischargeable, and to obtain an injunction.4

For an individual filer, the list matters in both directions. A debtor who wants a student loan discharged must file an adversary proceeding and prove undue hardship. A creditor, the trustee or the U.S. trustee who objects to the debtor's discharge also does it by filing a complaint, which starts an adversary proceeding.5 6 7 8 1

What is the order of events?

The national rules set the sequence below. A court's local rules and the judge's orders can add steps and change dates, so the court's website and the papers the court sends are the place to confirm them.9 3

1. A complaint is filed with the clerk in the district where the bankruptcy case is pending. It must refer to the name, number and chapter of that case.10 11 12
2. The fee is paid, if one applies. Under the fee schedule effective December 1, 2023, the fee for filing a complaint is $350, and it must not be charged if the debtor is the plaintiff.13
3. A summons is issued. The federal courts' forms page includes the Summons in an Adversary Proceeding (Form 2500A) and the Adversary Proceeding Cover Sheet (Form 1040).2 1 14
4. The summons and complaint are served on the defendant. They must be delivered, or deposited in the mail, within 7 days after the summons is issued. If they are not, a new summons must be issued.2 1
5. The defendant answers. A defendant must serve an answer within 30 days after the summons was issued, unless the court sets a different time. The United States or its officer or agency has 35 days.3
6. The case moves into litigation. That can include discovery, the process of learning about the other side's case before trial through tools such as depositions, interrogatories and requests for documents.1

How does service work?

Service is the formal delivery of the summons and complaint to the defendant. Bankruptcy Rule 7004 allows service by first-class mail within the United States, and personal service may be made by any person who is at least 18 years old and not a party.2 1

Who has to receive the papers depends on who the defendant is. When the defendant is the United States or a federal agency, the rule requires mailing to more than one office, which is covered in a separate guide on serving the United States.2

Is there a deadline to file one?

It depends on who is filing and why. Apart from certain creditor complaints that have their own deadline, a complaint asking the court to decide whether a debt is dischargeable may be filed at any time, and if a closed case is reopened to allow it, no reopening fee is required.7

Complaints against the debtor run on a clock. In a Chapter 7 case, a complaint objecting to the discharge must be filed within 60 days after the first date set for the meeting of creditors, and the same 60 days applies to creditor complaints about the dischargeability of certain debts, such as debts said to arise from fraud.6 7 8 1

How is it different from a motion or the rest of the case?

The main case is built around official forms and a meeting with the trustee. An adversary proceeding is a lawsuit, with a plaintiff, a defendant and a judge deciding disputed facts.1

Many disputes in a bankruptcy case are raised by motion instead, a request to the judge for a decision on one issue. A dispute handled that way is called a contested matter, and a creditor asking to lift the automatic stay is a common example. If the request is on the Rule 7001 list, it needs a complaint, not a motion.1 4

What is different about a student loan case?

For a federal student loan, the government also uses a process the Justice Department and the Department of Education introduced in November 2022: the debtor fills out an attestation form, the government decides whether to recommend a full or partial discharge, and the bankruptcy judge makes the final decision.5

That process does not replace the lawsuit. The debtor still files the adversary proceeding, and the local U.S. Attorney's Office for the district where the bankruptcy is pending handles the case for the government.5 15

Who can help with an adversary proceeding?

Court staff can explain procedures and where the forms and rules are, but one bankruptcy court warns that staff cannot say whether a complaint properly presents a claim or who should be served.16 17

The federal courts strongly recommend getting advice from a qualified attorney, and say people who cannot afford one may qualify for free legal services.9 18 19