Legal Question in Bankruptcy in New York

Can someone advise as to the period a trustee can actually look back in the NY Eastern District? Specifically, I sold real estate slightly more than two years ago and realized profit (roughly $100,000) which was immediately distributed among my children - as an early inheritance. Since that time things have taken a severe financial downturn and my spouse and I need to file a Chapter 7. So the question involves whether the trustee can look beyond a two year period and attempt to get at the profit realized the property sale. I was told generally the reach period was 2 years but that some states may have variations on this rule. Thank you very much for any assistance that can be provided.

Asked on 5/20/13, 9:05 am

1 Answer from Attorneys

Andrew M. Doktofsky Andrew M. Doktofsky, P.C.

The statute of limitations for fraudulent transfers in New York is six years. Bankruptcy trustees may avoid fraudulent transfers made during that time period. If you were insolvent at the time of the transfer to your children, or the transfer made you insolvent, then it could be deemed a fraudulent transfer. A bankruptcy trustee could bring lawsuits against your children to recover the money that was distributed to them. However, you should consult with an experienced bankruptcy attorney to discuss your situation in detail and to see what your options are.

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Answered on 5/20/13, 9:27 am

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