Statute of Limitations to Be Charged in a Bankruptcy Fraud

The statute of limitations for bankruptcy fraud is five years.

Federal laws dictate that people can receive debt relief through provisions of the federal bankruptcy code. In seeking relief, the debtor may not commit fraud. If he does, he can be brought up on criminal charges if caught.

Fraud

A debtor commits bankruptcy fraud when he conceals assets or makes a fraudulent transfer of them, or makes a false oath, account, declaration or claim.

Discharge

In personal bankruptcy cases, a bankruptcy trustee plays a major role. In Chapter 7, the trustee sells the debtor's assets and uses the proceeds to pay the debtor's creditors. In Chapter 13, the trustee accepts debt repayment plan payments from the debtor and distributes them to his creditors each month for three or five years. After the creditors have been paid, the debtor receives a discharge of debts.

Statute of Limitations

If, within five years of a debtor's discharge, authorities suspect that the debtor has committed bankruptcy fraud, they can charge the debtor. In the case that the bankruptcy court denied the debtor a discharge of his debts, the statute of limitations runs for five years after the date the discharge was denied.

References

• U.S. Department of Justice: Bankruptcy Fraud