The length of the lookback period varies depending on the type of transfer being examined. The preferential transfer period is 90 days prior to the bankruptcy filing date for ordinary creditors and one year prior for insiders, such as family members or business partners. The fraudulent transfer period, on the other hand, can extend back four years and possibly longer if the IRS has debts going back many years.

The lookback period refers to the period of time before the bankruptcy filing date that the court examines to determine whether any assets or transactions can be deemed fraudulent or preferential and is discussed in more detail herein.

The lookback period is divided into two types: the preferential transfer period and the fraudulent transfer period. The preferential transfer period is the period during which the person filing bankruptcy (commonly referred to as the debtor) has made payments to certain creditors that are considered “preferential” over other creditors. The fraudulent transfer period, on the other hand, is the period during which the debtor has transferred assets to another party with the intention of hiding those assets from creditors.

During the lookback period, the bankruptcy system can look at the debtor’s financial transactions to determine if any transfers or payments were made that could be considered fraudulent or preferential. In the case of preferential transfers, the court will look for transactions where the debtor made payments to certain creditors, such as friends or family members, while neglecting to make similar payments to other creditors. If the court determines that a preferential transfer was made, it may require the creditor who received the payment to return the funds for distribution among all creditors.

In the case of fraudulent transfers, the court will examine transactions in which the debtor transferred assets to another party with the intention of hiding those assets from creditors. This can include transferring assets to a family member or friend, selling assets for less than their value, or transferring assets to certain types of trusts. Note: most trusts are revocable living trusts, which do not cause problems. If the bankruptcy system determines that a fraudulent transfer was made, it may require the recipient of the assets to return them to the bankruptcy estate for distribution among all creditors.

It is important for debtors to be aware of the lookback period when considering bankruptcy. If a debtor has made any preferential or fraudulent transfers during the lookback period, those transactions will be reviewed by the bankruptcy system and may result in a lawsuit against the people involved. Scary! The time to discuss these issues is before filing for bankruptcy, and a lawyer can help avoid trouble in court. Some people assume they can avoid problems by “leaving that out” of the papers. The bankruptcy documents require disclosure of many transactions, and transfers involving real estate are easily seen in the county records, and transfers of vehicles are maintained by the Department of Motor Vehicles, so there are several reasons to carefully answer all questions in the bankruptcy forms.

In conclusion, the lookback period is a critical component of the bankruptcy process that ensures all creditors are treated fairly. By examining the debtor’s financial transactions during the lookback period, the court can identify any preferential or fraudulent transfers and ensure that all creditors receive a fair share of the debtor’s assets. Ultimately, the goal of the bankruptcy process is to provide a fresh start for the debtor while also ensuring that creditors are treated fairly.

At the Law Office of Michael Primus, we have helped hundreds of clients get out of debt, stop wage garnishments, and start fresh through bankruptcy.  If you live in northern California and have debt problems, contact us for a free consultation.  Offices in Walnut Creek, Antioch and Hercules.

Sources
11 U.S.C. 547

11 U.S.C. 548

The short answer is no. People often assume filing bankruptcy means the system will take a 401(k) or IRA to repay debts, but the truth is the law safeguards 401(k) plans and IRAs along with just about everything most people in northern California have as necessities of life.

This includes union pensions, 401(k)s, 403(b)s and IRAs. For IRAs (including Roth IRAs) the protection is limited to just over 1.5 million per person. If you have more than 1.5 million in your retirement accounts bankruptcy may not be the best choice for you. This limit is adjusted every three years to account for increases in the cost of living.

A word of caution, once money is withdrawn from a 401(k) or an IRA it will no longer be considered retirement, and for that reason will be treated differently which is not necessarily a problem. If you are considering withdrawing money from a 401(k) or an IRA to resolve debts issues, you should consult a bankruptcy attorney. Often bankruptcy will forgive debts while allowing a person to keep their retirement.

At the Law Office of Michael Primus, we have helped hundreds of clients get out of debt, stop wage garnishments, and start fresh through bankruptcy.  If you live in Contra Costa County and have debt problems, contact us for a free consultation.  Offices in Walnut Creek, Antioch and Hercules.

During the Pandemic, lots of businesses borrowed money from the U.S. Small Business Administration (SBA) to stay in business. Small loans below $25,000 didn't need any security, but larger loans needed businesses to give something valuable as a guarantee.
 If a business borrowed more than $200,000, the SBA required someone to personally guarantee the loan. This means that the person guaranteeing the loan and the business itself are responsible for paying it back. If the business closes, that often leaves the individual responsible or some might say on the hook. In 2023, these loans started coming due, and many businesses are finding it hard to repay them, even though the interest rate is low.

If a business or individual can't repay an SBA loan and has to declare bankruptcy, it's possible to discharge the loan in most cases. SBA loans are treated the same way as other debts in bankruptcy. Most businesses took out SBA loans with the intention of saving their business and repaying them. Unfortunately, because of the ongoing economic crisis and high inflation, many businesses are unable to repay these loans. If this is the case, it shouldn't be a problem to discharge the debt in bankruptcy.

At the Law Office of Michael Primus, we have helped hundreds of clients get out of debt, stop wage garnishments, and start fresh through bankruptcy.  If you live in Northern California and have debt problems, contact us for a free phone consultation.