An adversary complaint is a separate lawsuit inside the bankruptcy case where a creditor is objecting to your discharge. You and your Old Mill Creed bankruptcy attorney will get notice of the filing. The creditor is basically saying you did something fraudulent under the Bankruptcy Code that would allow for either that debt or your entire debts to be held non-dischargeable.
If a creditor is successful in bringing an adversary complaint and if the creditor is successful in having the debt determined to be non-dischargeable, then that debt will forever be due and owing and you will not be able to file Chapter 7 bankruptcy on that debt in the future.
Most types of adversary complaints involve credit card run ups. A credit card run up is when someone, in anticipation of filing bankruptcy, uses the credit cards for an unlawful or an unethical or fraudulent purpose.
When someone comes to see me for bankruptcy, I caution them not to use their credit cards again. Some people take this information and go the other way with it. Some people figure, well, they have a little bit of credit limit left, they have a little balance left, they’re filing bankruptcy anyway; why not extract every little piece of credit they can and get whatever they can out of their credit card before they have to file bankruptcy.
My clients know that they’re not going to be able to keep those credit cards after the bankruptcy, so they know they’re gone, so they figure sometimes why not take what they can get. This is contrary to the advice that I give them but, unfortunately, sometimes they do it. Not only do they do it, but they won’t tell me that they do it because it’s contrary to what I just instructed them.
It is not until after the bankruptcy case is filed that I receive a letter typically from a credit card company alleging that my client made certain purchases within a certain number of days prior to filing to a certain dollar amount. I will then analyze that letter and determine whether or not we should talk about a settlement.
If we decide to settle that means an adversary case is never brought and my client does not have to worry about the entire debt being held non-dischargeable. In other cases, the amount that my debtor had used on the credit card is so small that I know that the credit card company is really not going to hire a local bankruptcy lawyer and bring and adversary.
One such example would be if someone charged anywhere from $500.00 to $1,500.00 within a two to three month period prior to filing the bankruptcy. Although a creditor may be successful in bringing such an adversary complaint, it is not likely or worth the time to receive a judgment of non-dischargeability on either $500.00 or $1,500.00.
Provided no creditors object and there are no adversary cases filed by either a creditor or the trustee or the U.S. Trustee’s Office, the case in a Chapter 7 will go to discharge approximately 60 to 90 days after the date for the 341 meeting of creditors. Thus, the actual time from filing until discharge in a standard Chapter 7 bankruptcy case is approximately 120 days.