Section 523 Nondischargeability Litigation: Plaintiff and Defense Strategies

The Bankruptcy Code excludes from discharge numerous types of debts, including those that arise from the debtor's improper conduct or if public policy mandates the continued liability of the debtor for such claims. Under 523, any creditor may commence an adversary proceeding by filing a complaint to have its debt declared nondischargeable.

If successful, only that specific debt would be nondischargeable while discharging all other debts on the debtor's petition and schedules. Rule 4007 governs the procedures in objecting to discharge, and the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) revised the provisions governing the dischargeability of certain obligations.

Savvy counsel will prepare a strategic approach in litigating bankruptcy adversary proceedings, leveraging each stage of the adversary proceeding to advocate for a client's interests. Even without going to trial, the procedural steps involved in such litigation can provide significant strategic opportunities to resolve disputes--or develop the defense or prosecution--before a trial is set to begin.

Listen as our authoritative panel of bankruptcy litigators discusses strategies and tactics for prosecuting and defending 523 exceptions to discharge adversary proceedings, including best practices for pleading to state a claim for relief and procedures for filing motions to dismiss and motions for summary judgment. The panel will provide practical insights into understanding when collateral estoppel or res judicata from prior litigation applies, strategies regarding settlement and mediation, advising clients on options for settlement vs. litigation, and discovery issues and trial strategies.