What Is the Federal Bankruptcy Fraud Statute of Limitations?

Learn how to determine the statute of limitations period for bankruptcy fraud crimes.

By , Attorney Tulane University School of Law
Updated 4/26/2024

How much time a federal prosecutor has to file bankruptcy fraud charges depends on the bankruptcy fraud "statute of limitations." The statute of limitations for a crime is the law that tells you how much time the government has to bring criminal charges. Once the limitation period has run, the government can no longer prosecute the crime.

What Is Bankruptcy Fraud?

Bankruptcy fraud is a term used to describe a variety of crimes that can occur in a bankruptcy case. It applies to wrongful acts such as:

  • concealing assets
  • transferring assets to keep them from creditors
  • concealing or destroying records
  • falsifying bankruptcy forms
  • perjury (making false statements under oath)
  • using a fake identity or filing in multiple jurisdictions
  • bribery of a court official, and
  • embezzlement from the bankruptcy estate.

You'll find most bankruptcy crimes in the federal statutes. (18 U.S.C § 152 and 18 U.S.C. § 157.) Keep in mind that differing factors, including the nature of the crime, determine when the limitation period begins.

The Bankruptcy Fraud Statute of Limitations Period

In most cases, the bankruptcy fraud statute of limitation period (the time in which a prosecutor can bring an action) is five years. However, determining when the limitation period begins and ends is tricky. Crimes fall into three general types:

  • Single event. The offense is a definable event that takes place on a specific date. For instance, telling a lie under oath at the 341 meeting of creditors (the hearing all bankruptcy filers attend).
  • Multiple events. The crime involves a series of actions or requires several steps to accomplish. For instance, in a conspiracy case, the limitation period doesn't begin to run until a conspirator commits the last act that furthers the crime.
  • Continuing crime. The offense continues until the condition that defines the crime no longer exists. An example would be hiding an asset. As long as the property stays hidden, the crime continues.

Other factors can affect the statute of limitations. For more information, read Calculating the Statute of Limitations. Also, consider consulting with a knowledgeable bankruptcy attorney about the specifics of your case.

Determining When a Bankruptcy Fraud Statutes of Limitations Starts

The law determining the applicable statute of limitations depends on the type of offense.

  • Hiding assets. The law treats concealment cases differently than other bankruptcy crimes. (18 U.S.C. § 3284.) Often, the debtor will conceal an asset before filing the bankruptcy case or fail to disclose it in the bankruptcy schedule, but it doesn't come to light until after the bankruptcy case ends. Therefore, concealment is considered a continuing offense. The limitations period begins when the court grants a discharge (the order that wipes out qualifying debt), enters an order denying the discharge, or dismisses the case.
  • Other bankruptcy crimes. The general statute of limitations for noncapital federal crimes is five years. (18 U.S.C. § 3282.) This statute of limitations applies to perjury, filing a false bankruptcy form, embezzlement, bribery, and destroying records, and all other bankruptcy crimes. It also applies to many other federal offenses brought with bankruptcy crimes, like mail or wire fraud.

Example. Daria's business was floundering, and she was considering bankruptcy. On January 1, 2013, Daria transferred a piece of real property worth $10,000 to her brother for $10. On February 3, 2014, Daria filed a Chapter 7 case but didn't disclose the transfer or the cash. Not suspecting anything was amiss, the court granted Daria's discharge on May 15, 2014. Six months later, her former business partner contacted the trustee to ask about the proceeds of the sale of the partnership assets. At a special examination on December 1, 2014, Daria denied everything under oath.

Daria has potentially committed several crimes. The limitation periods will expire as follows:

  • Property transfer—January 1, 2018 (five years after the property transfer).
  • Perjury in the bankruptcy schedules—February 3, 2019 (five years after she filed the schedules with the court).
  • Concealment of the $20,000—May 15, 2019 (five years from the discharge).
  • Perjury under oath at the special examination—December 1, 2019 (five years from the exam date).

Other limitations periods exist for other possible crimes. You should contact a knowledgeable bankruptcy attorney for information about your particular case.

Need More Bankruptcy Help?

Did you know Nolo has made the law easy for over fifty years? It's true, and we want to ensure you find what you need. Below you'll find more articles explaining how bankruptcy works. And don't forget that our bankruptcy homepage is the best place to start if you have other questions!

Our Editor's Picks for You

More Like This

When the Bankruptcy Trustee Suspects Fraud

How to Prove Bankruptcy Fraud

Bankruptcy Fraud Consequences and Penalties

What to Consider Before Filing Bankruptcy

Will the Trustee Come to My Home to Collect Property?

Selling Property Before Filing for Bankruptcy

I transferred property out of my name. Should I wait to file for bankruptcy?

Options If You Can't Afford a Bankruptcy Lawyer

Helpful Bankruptcy Sites

Department of Justice U.S. Trustee Program

United States Courts Bankruptcy Forms

We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.

Get Professional Help
Get debt relief now.
We've helped 205 clients find attorneys today.
There was a problem with the submission. Please refresh the page and try again
Full Name is required
Email is required
Please enter a valid Email
Phone Number is required
Please enter a valid Phone Number
Zip Code is required
Please add a valid Zip Code
Please enter a valid Case Description
Description is required

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Choose attorneys to contact you