Fraudulent Transfer Rules: Transfers That Sink Bankruptcy Cases
Transferring assets out of your name before filing is the single most dangerous move in bankruptcy. Trustees can unwind transfers made for less than fair value, the look-back reaches years before the filing, and intentional concealment can cost the discharge itself.
Two kinds of fraudulent transfer
Actual fraud means transferring property intending to hinder or defraud creditors — putting the boat in a cousin's name. Constructive fraud requires no bad intent at all: any transfer for less than reasonably equivalent value while insolvent qualifies, including generous gifts.
How far back trustees can reach
Section 548 reaches transfers within two years of filing, and trustees can borrow state fraudulent transfer statutes — four years in both Arizona and Washington — to reach further. The petition itself asks about transfers under penalty of perjury.
The real penalty is losing the discharge
The transfer being unwound is recoverable; lying about it is not. Concealing or transferring property with intent to defraud within a year of filing is grounds to deny the entire discharge under § 727 — leaving every debt owed with all assets exposed.
Exemption amounts and rule thresholds change on statutory schedules. See our monthly rule reports for the current figures with citations to the official sources.
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Majors Law Group, P.C. — an independent bankruptcy firm running its practice on Bankruptcy.AI — handles Chapter 7 and Chapter 13 cases in Arizona and Washington.
Bankruptcy.AI is a technology platform, not a law firm, and does not provide legal advice. Majors Law Group, P.C. is a separate, independent law firm. This page is general information and is not legal advice; outcomes depend on your specific facts.