The Continuing Concealment Doctrine

16 May The Continuing Concealment Doctrine

The Continuing Concealment Doctrine applies when someone appears to have transferred an asset, but retained secret control or a beneficial interest. It commonly applies where someone convenys a house to another, but continues to live there, pay the mortgage and utilities, maintain and improve the property, and so forth. It can apply to stocks or a bank account, if the dividends or interest are still paid to the former owner who also retains control over future transfers of the fund.

Despite any state’s statute of limitations, a bankruptcy trustee can recover a fraudulently transferred asset from the transferee if the concealment continued into the limitations period. A bankruptcy discharge can be denied if the concealment continued into the year before the bankruptcy was filed.

Dry reading, huh? Way too many times, a client comes sees me after having acted as their own attorney (having a fool for a client!) and made these kinds of transfers. Unscrambing the omelette (mixed metaphor, sorry) can be difficult and require an extensive waiting period.

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L. Jed Berliner practices exclusively in consumer bankruptcy, foreclosure defense, and related consumer protection litigation such as credit card defenses and suing debt collectors. He established his Springfield, MA practice in 1988. Attorney Berliner is a regular and active contributor to the Bankruptcy Law Network, the Bankruptcy Roundtable, and the National Association of Consumer Bankruptcy Attorneys, three specialized consumer bankruptcy forums on the Internet, and is an informal mentor to regional practitioners. He is recognized by his peers as an expert in consumer bankruptcy issues. He thoroughly enjoys being rated "excellent" in his client surveys.

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