![]() ![]() Under the Bankruptcy Code, the look back period is two years however, the trustee may use state law if the allowed look back period is longer. How long can a trustee look back in time to find a fraudulent conveyance? See also: Can I Pay Back Family Before Bankruptcy? The Look Back Period for a Fraudulent Transfer The bona fide purchaser has the right to retain the property. A bona fide purchaser is one who acted in good faith to purchase the property without notice of the outstanding rights of others to the property. An exception is the bona fide purchaser rule. The trustee may recover the property from either the immediate recipient (Joe) or from anyone else to whom the property was subsequently transferred (perhaps a cousin). If the conveyance is then found to be fraudulent, you’ll lose your right to claim an exemption for the property. ![]() In our example with Uncle Joe, if you transferred your house to Joe for $1 and then filed bankruptcy, the trustee would serve Joe with a complaint seeking to recover the value of the home. Once a property transfer is deemed fraudulent, either because there is proof of fraud or the sale price is too low, the trustee may attempt to recover the property, or the value of the property, and make it part of the bankruptcy estate. In Bankruptcy, the Trustee Can Sue to Unwind the Transfer Signs of financial distress are being insolvent or rendered insolvent, unreasonably small capital, and incurring debts beyond the ability to pay as they mature.
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