An adversary proceeding is the bankruptcy court’s version of a complaint or petition in civil litigation. The adversary proceeding is governed by Federal Rule of Bankruptcy Procedure (FRBP) Rule 7001 and among other purposes, is a proceeding to recover money or property, or determine the validity or priority of a lien, or determine the dischargeability of a debt, or to obtain an injunction, or to obtain a declaratory judgment.
In North Carolina, as in all states, an adversary proceeding in bankruptcy is a lawsuit within a bankruptcy case. It is a separate process from the bankruptcy case itself, initiated by filing a complaint with the bankruptcy court. Adversary proceedings are governed by the Federal Rules of Bankruptcy Procedure, specifically Rule 7001. These proceedings can serve various purposes, such as recovering money or property, determining the validity, extent, or priority of liens, deciding on the dischargeability of certain debts, obtaining injunctions, and seeking declaratory judgments. The outcomes of adversary proceedings can significantly impact the rights of the parties involved in a bankruptcy case. Since bankruptcy is under federal jurisdiction, the procedures and rules for adversary proceedings in North Carolina are consistent with federal bankruptcy law and are not subject to state statutes.