Adversary Proceeding (AP)

Definition - What does Adversary Proceeding (AP) mean?

An adversary proceeding is a complaint filed by one party against another party within a bankruptcy proceeding. The adversary proceeding can be initiated by a number of different parties including the debtor, a creditor or a third party. The basis of an adversary proceeding is to formally object to one or more terms that are being set forth in the bankruptcy proceeding.

Justipedia explains Adversary Proceeding (AP)

A common example of an adversary proceeding happens when a creditor objects to the discharge of a debtor's debts, and shows cause as to why this should not happen. Another common adversary proceeding can be initiated by a debtor against a creditor in order to stop them from breaking the terms of the bankruptcy plan by selling a linked or collateral asset. An adversary proceeding can also occur when debtors attempt to discharge student loan debts as this is a category that is not very clear. A person who files for an adversary proceeding is referred to as the plaintiff within the bankruptcy, and the respondent is referred to as the defendant. These proceedings have to be rectified and completed before the bankruptcy plan can be finalized.

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