In bankruptcy, complaints refer to a filed lawsuit within a debtor’s bankruptcy case. This is sometimes referred to as an “adversary proceeding” where one party sues another in a bankruptcy court. While filed complaints are taken as part of the bankruptcy case, such a complaint is taken separately. Following the Bankruptcy Code, not only are the creditors entitled to a complaint but also debtors and bankruptcy trustees.


How does complaint in a bankruptcy case works?

Complaints are filed by the plaintiff into the bankruptcy court stating the facts that pertain to the complaint lawsuit. Complaints in bankruptcy is treated just like civil cases however it is the bankruptcy court that sets the judgment based on the bankruptcy laws and the facts stated in the filed complaint. A summons is usually issued by the bankruptcy court after the complaint is filed by the plaintiff who will in turn serve it upon the defendant or who is being sued with the complaint copy. Once the defendant receives such a copy, then they have to respond to the complaint with an answer within 30 days or else the court will enter a default and make the plaintiff attain default judgment in the case.

Different types of complaints filed in bankruptcy

There are many reasons why complaints are filed in bankruptcy. These reasons might include:

  • Debt dischargeability – most of the time, creditors are the ones who go against the dischargeability of debts filed by a debtor. When this happens, the creditor who is the plaintiff will that certain debts deemed dischargeable by the debtor not be discharged due to claims of fraud that may either be constructive or actual.
  • Discharge objections – failing to comply with the necessary documents, court orders, or committing fraud gives the Office of the United States Trustee or the trustee itself holding the bankruptcy case and most especially the creditors, to file a complaint.
  • Fraudulent transfers – in any case, fraud are often a strong point why complaints are filed in a bankruptcy court. In this case, the bankruptcy trustee acts as the plaintiff and files a case when it is proven that a debtor makes a transfer of any property or money to another person within two years before the bankruptcy case is filed or if constructive or actual fraud is involved.
  • Joint sales of property – when a debtors happens to have a joint property with someone, for example a spouse, the bankruptcy trustee can file a complaint to split apart or sever the interests of both owners and persuade the joint owner to sell the property and use the proceeds to pay off the debts.
  • Preferential transfers – just like fraudulent transfers, the bankruptcy trustee can file a preference adversary or complaint when a repayment of more $600 is made to the creditors by the debtors within 90 days before the bankruptcy case is filed.

Because complaints are considered as a separate case in bankruptcy, it is better to have a bankruptcy attorney to help with your case. Also, a bankruptcy lawyer would be vital in avoiding cases of complaints by making sure that you follow the right schedules as well as rules and orders provided by the court.