Posted on: 12 August 2018
The bankruptcy codes may be of little interest even to those who are actively involved in a federal filing, but if you encounter problems you will need to understand why. In most cases, filers breeze through a chapter 7 bankruptcy filing in a few months without incident but it does pay know about some issues like adversarial actions. Whether you are the subject of such as action, or the instigator, read on to learn about some common adversarial actions and be prepared.
Who Can File?
On the face of it, you might consider yourself as being the only pertinent party to concern yourself with when filing bankruptcy, but even the simplest cases can involve several different parties and any one of them may bring an adversarial action. The goal of an adversarial action is to obtain "relief." This is a legal term that means the filers are seeking a ruling in their favor about some aspect of your bankruptcy case. Each and every adversarial action garners its own separate case number and hearing events. These actions can be brought by:
- The bankruptcy trustee
- Any one or more of your creditors
Examples of adversarial actions
Fraudulent credit card debt: This action may stem from your use of credit cards in the time period leading up to your bankruptcy filing. For example, your Mastercard credit card may file an adversarial action to prevent you from including a vacation charged to your card a month before you filed. There are strict rules about credit card use when either charging items or to take cash advances. Filers are not allowed to take advantage of a bankruptcy to run up debt and then ask that it be discharged. In an associated issue, the creditor may object if false information was used to apply for the debt.
Fraudulent asset transfers: As with credit card use before a filing, there are rules about ridding yourself of property before a filing. You might know that your boat is going to be seized by the bankruptcy trustee as part of the bankruptcy agreement. Any property not protected by an exemption can be sold and the proceeds used to pay creditors. If you "gave" your boat to your brother in an effort to prevent it being seized then the bankruptcy court has a right to take back that property even if you sold it at fair market price.
Preferred creditors: It is not up to you to decide what creditors you want to pay off, the bankruptcy court trustee is tasked with that responsibility. If you owe money to someone and decide to pay the balance of the loan off within 90 days prior to filing then that action might be subject to an undoing.
Speak to your bankruptcy lawyer to learn more about adversarial bankruptcy actions.Share