What is a fraudulent transaction and how will it affect my bankruptcy?

A fraudulent transaction can occur when the debtor transfers property with the intent to hinder, delay, or defraud his or her creditors. Actual fraud requires proof of intent from the person challenging the transfer. It can also occur when property is transferred for an unreasonably equivalent value without regard to the debtor’s actual intent. Rather the focus of the inquiry rests on whether the debtor received reasonably equivalent value. A recipient of the fraudulent transfer may be required to return this property or pay damages to the bankruptcy estate.

If the court finds that a debtor has committed a fraudulent act, then the debtor’s discharge will be denied. A false oath in connection with the bankruptcy, attempted bribery, and concealment of assets, may also lead to criminal penalties, such as fines and imprisonment. When fraudulent conveyance is suspected, an experienced bankruptcy attorney can help you to evaluate the options available to you based on the facts in your case.