Could I File Adversary Proceedings for a Creditor Violation?

Consumers and Adversary Proceedings

People filing for bankruptcy can also bring adversary proceedings. These are almost always brought against creditors for violations of the automatic stay or the discharge injunction. Generally, an adversary proceeding brought for a stay or discharge violation will also contain other claims based on federal and state law. Your attorney can tell you which claims are available to you.

If your creditors are harassing you during or after your bankruptcy case, you have the right to file an adversary proceeding. Doing so protects your rights and can result in your collecting damages for the creditor's misconduct. In particular, discharge violations tend to create more claims than the violation itself. For example, if a creditor continues to report a discharged debt as delinquent and continues collection attempts on that debt, the creditor has likely violated both the Fair Credit Reporting Act and the Fair Debt Collection Practices Act.

In such a situation, it is possible to recover damages for the discharge violation, the fair credit reporting violation, and the fair debt collection violation in the same case. Although these kinds of claims can go to trial, it is common to see creditors settle these claims before substantial litigation takes place. This is because most creditors have funds set aside specifically for satisfying judgments and settlement agreements.

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