In bankruptcy, the parties involved can disagree and file complaints
When creditors, bankruptcy trustees or debtors have disputes about the dischargeability of certain debts - or the protection of certain assets - an adversary proceeding may result. Either side can file a complaint against the other in Bankruptcy Court for a variety of reasons:
- A creditor may argue that a debt owed should not be discharged in bankruptcy due to one of the exceptions such as fraud, willful injury, or that the transaction was conducted in bad faith
- The bankruptcy trustee may argue that schedules were filed improperly, or they were intentionally filled-out in bad faith. Here, there may be an attempt to recover funds or property
- A bankruptcy filer may file an adversary proceeding against a creditor to recover damages for an automatic stay violation
When creditors are ordered to stop, they have options
Not only will a creditor file an adversary proceeding to argue a specific debt should not be discharged, but creditors can also request that the bankruptcy judge lifts an automatic stay.