How to set aside a bankruptcy petition

Written by mike broemmel
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As a creditor of a person or business in bankruptcy you possess certain rights through which you are able to challenge the debtor's case. One tactic is to file an adversary proceeding, a procedure that permits you to challenge the discharge of your particular debt. Additionally, if the evidence permits, you can seek to set aside the entire bankruptcy petition in certain circumstances.

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Things you need

  • Proof of claim form
  • Complaint for adversary proceeding

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  1. 1

    Complete the proof of claim form sent to you by the bankruptcy court clerk. When a debtor files for bankruptcy she provides a listing of all her creditors to the court on what is known as a matrix or index of creditors. The court then uses this list to send all creditors a proof of claim form. A proof of claim is the document through which a creditor advises the court of the amount a debtor owes.

  2. 2

    File the proof of claim form with the clerk of the bankruptcy court. Be certain to file the proof of claim form by the deadline established by the court. The ultimate due date is included on the form's front page.

  3. 3

    Request a proof of claim form from the bankruptcy court clerk if you do not receive one in the mail. Again, make sure you complete and file the form in a timely manner.

  4. 4

    Draft a complaint for adversary proceeding. You can obtain a standard complaint for adversary proceeding form from the bankruptcy court clerk. In some jurisdictions, this form is available for download from the court's website. Include within the complaint the specific reasons why you believe the bankruptcy petition should be set aside and the case dismissed. Common contentions include fraud committed by the debtor, hidden assets, failure to disclose assets and inappropriate preferential treatment to a particular favoured creditor.

  5. 5

    File the completed complaint for adversary proceeding with the bankruptcy court clerk. The court schedules a date and time for the actual adversary proceeding hearing.

  6. 6

    Attend the adversary proceeding hearing. The hearing is like a typical court trial (with no jury). Present all evidence and witnesses who support your position that the bankruptcy petition be set aside and the case dismissed.

Tips and warnings

  • File your complaint for adversary proceeding before the creditor's meeting scheduled in the bankruptcy case. The creditor's meeting is the session at which the trustee and creditors are able to question the debtor under oath. Having the complaint for adversary proceeding on file before this meeting allows you to obtain more information from the debtor regarding her assets, debts, income and expenses.
  • Prosecuting a complaint for adversary proceeding to set aside a bankruptcy petition is a complex and challenging task. Most individuals do not have the experience nor the understanding of the law necessary to succeed in such an attempt. Therefore, your interests and those of other creditors normally are best served if you retain legal counsel to represent you in such a case.

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