Understanding Bankruptcy Litigation and Contested Bankruptcy Cases


The bankruptcy process is certainly daunting when you don’t have any experience with it. And for the majority of individuals filing bankruptcy or considering the option, of course they don’t have that experience, because it’s the first time they’re going through this. That’s where the help of experienced attorneys comes into play, as they have the experience and expertise you can rely upon in your time of need.

Still, before pursuing any option, you can educate yourself and learn more of the basics to arm yourself with the knowledge you need to make a sound decision. Here, we’ll be discussing bankruptcy litigation, and contested bankruptcy cases. This is a key area where confusion sets in for many individuals, who are unsure of the difference between contested and uncontested cases, and what exactly bankruptcy litigation represents.

Bankruptcy litigation essentially refers to actions and motions which are initiated either by you or your creditors. The majority of personal bankruptcies do not go through litigation and are seen to conclusion in an uncontested process. However, it certainly is possible that your case could become contested depending on your creditors and the specific circumstances you’re facing.

For instance, motions could be filed that you turn over available liquid funds for distribution to creditors immediately. This is a motion for turnover. In other cases, a lender could seek to essentially overrule the impact of the automatic stay, with a motion for relief from automatic stay.

Additionally, if you’re filing for a chapter 13 bankruptcy, a trustee could potentially file an objection to the payment plan. The objection would likely be that the Chapter 13 plan set forth is underfunded. Similarly, a lender may file an objection to a discharge, with claims that a particular debt is not dischargeable.

In most cases, there is no need to contest a bankruptcy. If a case does become contested, the majority of those can be handled fairly smoothly between your attorney and the trustee or moneylender. This is handled via negotiation and compromise, hopefully forgoing the need to actually pursue courtroom actions of written discovery, depositions, and hearings.

As mentioned, be sure to turn to the assistance of experienced bankruptcy attorneys in your local area before taking any action. They’ll be able to guide you through the entire process, handle matters relating to bankruptcy litigation and contested bankruptcies should they occur, and help you make the correct decisions at each step of the process.