Bankruptcy litigation typically involves the defense of avoidance actions and dischargeability complaints. “Avoidance” actions are lawsuits brought by bankruptcy trustees against persons who received money, property, or some benefit from a debtor at some specified point before (and in some cases, after) the debtor files a bankruptcy case. The law allows a variety of transfers to be recovered by the bankruptcy trustee on the principal of fairness to all creditors. Thus, even if a debtor pays you an amount that you are legitimately owed, it is possible that the trustee can recover the funds you received. However, there are many defenses available to these avoidance actions. Our attorneys have litigated dozens of avoidance actions from all sides. “Dischargeability” complaints are filed by bankruptcy trustees or creditors seeking to deny debtors (typically in chapter 7) a discharge of some or all of their debts. Defending these actions is almost never included in the cost of the basic bankruptcy filing, and many bankruptcy attorneys do not engage in this type of litigation. We aggressively defend these cases, both for our bankruptcy clients and for clients of other attorneys who decline to extend their practice to litigation.
William H. Zimmerman