An Adversary Proceeding is a lawsuit within or related to a bankruptcy case, usually brought by a creditor of a bankruptcy debtor seeking certain relief from the bankruptcy automatic stay or discharge.  The bankruptcy Trustee may also bring an adversary proceeding against a debtor.

 

The most common reason for a creditor to bring an adversary proceeding is where the debtor acted fraudulently against the creditor.  In cases where the creditor can prove that the debt owed is based upon a fraud by the debtor, any bankruptcy discharge would not apply to the debt owed to this particular creditor.  One example is where the debtor applied for a loan, but has lied on the loan application.