Facts: A debtor filed a Chapter 13 bankruptcy petition and transferred property they owned into a revocable living trust to conceal the property from the bankruptcy court. The bankruptcy was dismissed by the court. Within two months of the first Chapter 13 bankruptcy petition, the debtor filed a second Chapter 13 bankruptcy petition, failing to record the property in their Statement of Financial Affairs (SOFA). The court demanded the debtor record a quitclaim deed transferring the property back from the trust to themselves. One year after transferring the property back to the debtor, the court allowed the debtor to file for Chapter 7 bankruptcy with full knowledge the debtor’s previous attempts at concealment. A judgment creditor discovered the property had been transferred from the debtor’s trust to the debtor.
Claim: The creditor sought to place a lien on the property, claiming the property was not protected under the one-year discharge limitation since the three consecutive bankruptcy cases were considered a single bankruptcy during which the transfer occurred.
Counter claim: The debtor claimed the creditor was not entitled to place a lien on the property since the fraudulent transfers occurred more than one year before their Chapter 7 filing and thus the property was protected under the one-year discharge limitation as each bankruptcy filing was separate.
Holding: A bankruptcy appeals court held the property is protected from the creditor’s lien since the property was transferred back to the debtor from the living trust greater than one year before filing for the Chapter 7 bankruptcy and thus the debtor is entitled to discharge protections.[In re Neff (February 20, 2014) _BR_]
The exceptions to the bankruptcy protection would be THE IRS, CHILD SUPPORT