How the Economy Has Given Rise to Adversarial Proceedings
By Paul Burkhart | Published on July 27, 2011 | 0 Comments
It is not surprising that in tough economic times, bankruptcy filings increase. As with any similar example of cause and effect, the less money that is being made, fewer people will be able to pay their bills on time or afford to maintain their current level of comfort. However, as bankruptcy filings increase, so does the response from those holding the debts, and there is now an increase in challenges to bankruptcy filings by creditors who are fighting to recover whatever losses they can. This is what’s known an “adversarial proceeding” and when a debtor is challenged with one, it may be a good time for Florida residents to call a bankruptcy lawyer in Palm Beach Gardens.
Paul Burkhart is one such bankruptcy lawyer in Florida with the Law Offices of Paul J Burkhart, and he says that the economic downturn has caused an increase in both bankruptcy filings and this adversarial response from creditors. “Because there’s been a huge increase in the bankruptcy filings, we’re now seeing more adversarial type of proceedings, meaning that because there’s so many filings there’s a lot more creditors challenging the filing.”
According to Burkhart, what typically happens is that a debtor decides to file for bankruptcy, takes care of the necessary paperwork to file, and then find they’ve received an objection to their bankruptcy process that challenges their right to file. “So you file for bankruptcy and a month later you get an adversarial proceeding which is essentially like a lawsuit within the bankruptcy proceeding, rejecting your ability to discharge the debt.” Burkhart says that because an adversarial proceeding is similar in nature to a lawsuit, that as a bankruptcy lawyer in Palm Beach Gardens, he must defend it exactly as one would a regular lawsuit.
Burkhart goes on to mention that there are certain instances in which an adversarial proceeding is more likely to be filed than in others. “There are all kinds of different reasons for someone to bring an adversarial proceeding against a debtor, but in the vast majority of cases, the biggest argument is that they’re alleging some type of fraud.” An example of this, Burkhart says, would be if someone owned a construction company and took a certain amount of supplies on credit from a supplier, knowing that their situation was hopeless and that they would soon be filing for bankruptcy. “In such a case, because you knew that you would be filing for bankruptcy soon, there is a good chance that the creditor will object to the bankruptcy filing.”
Though Florida residents should always file for bankruptcy with the help of an experienced lawyer, when an adversarial proceeding is thrown into the mix, it becomes doubly important to have legal help. “Sometimes creditors are aggressive and try to get the money back outside the bankruptcy proceeding so they can pursue it in state or federal court.”
As such, if you are filing for bankruptcy, consider hiring a bankruptcy lawyer in Palm Beach Gardens who can help you navigate the process and any other difficulties that might arise in what is already a tough enough time.
*Disclaimer: This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.