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.
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:
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.
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:
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.
The law determining the applicable statute of limitations depends on the type of offense.
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:
Other limitations periods exist for other possible crimes. You should contact a knowledgeable bankruptcy attorney for information about your particular case.
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