Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Transfers completed or "perfected" within two (2) years of the filing of the petition for bankruptcy may be reversed by the Trustee or the Court. Under the old bankruptcy law (prior to October/2005) there was a one year limit, but under the current bankruptcy law (after October/2005), there is a two year limit. You can review this under 11 USC Section 548 of the bankruptcy code. The reference to the two year limit is in the very first paragraph. However, your trustee may not feel that the transer was fraudulent under the circumstances.
There are two types of fraudulent transfers in bankruptcy law. The first, actual fraud, involves the intent to defraud creditors, the other, sometimes called constructive fraud, involves a transfer, which is made in exchange for grossly inadequate consideration.
Actual fraud is committed when:
1) A transfer is made within two (2) years before the date of the filing of a bankruptcy petition
2) The tranfer is made with the intent to hinder or defraud a creditor
Constructive fraud also requires two conditions:
1) In exchange for the transfer, the debtor received less than the reasonably equivalent value and
2) The debtor is unable to pay debts either at the time the transfer was made or as a result of the transfer itself.
I would suggest returning to the attorney who advised of the correct two year limit to assist with your mother's bankruptcy case filing and to assess whether the transfer could run the risk of being classified as fraudulent under the circumstances.
I hope you found this information to be helpful.
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