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An adversary proceeding begins with the filing of a complaint to initiate the proceeding. In contrast, a contested matter occurs within the bankruptcy case. A contested matter starts with a motion filed in the bankruptcy case itself.
Under Rule 7004(f), the summons must be served within 10 days of issuance. The other pleading periods in adversary proceedings are the same as those in civil actions before the district courts, except that the United States is allowed 35 rather than 60 days to respond.
Sometimes an adversary proceeding will arise when a debtor owns property with someone else. The trustee may need to bring a lawsuit to divide your interest in the property from the interest of the co-owner so that they can force a sale and take the proceeds to pay your creditors.
The proper procedure is to file a motion to compromise and settle in the legal case, not the adversary proceeding. That pleading should only have the legal caption, as the body of the motion should contain the adversary proceeding information.
After an adversary complaint is filed, the defendant has a specific deadline to file and serve a written response to the complaint, and then a series of pre-trial hearings/conferences take place until the lawsuit is settled, dismissed, or goes to trial.