What Is the Look Back Period for Chapter 7 Bankruptcy?

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Bankruptcy is a federal court process where an individual or business files for bankruptcy in order to eliminate and/or pay off outstanding debts. There are six types of bankruptcy proceedings, referred to by the chapter of the federal bankruptcy code: chapter 7, 9, 11, 12, 13, and 15. In Chapter 7 bankruptcy, there is a "look back period" -- which is the period 90 days prior to filing the bankruptcy petition -- where the bankruptcy trustee can examine all information to determine if there were any unacceptable transfers of money or assets.

Purpose of the Look Back Period

  • The look back period is designed to let the trustee determine if the debtor transferred any assets to a third party before filing for Chapter 7 bankruptcy. For example, suppose a debtor paid back a loan to a family member or transferred a property out of his name right before filing for a Chapter 7 bankruptcy. These types of actions are prohibited. The look back period can be increased further than 90 days if an improper transfer is discovered within the standard 90 days prior to filing the bankruptcy. The trustee can then sue the debtor or third party to recover the improperly transferred assets.

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