Consumer Bankruptcy Journal Fall 2016 - Page 25

CLAWBACK PERIODS Fraudulent Transfer if USA is creditor Fair Debt Collections Practices Act (AFDCPA@) Actual Intent 6 years or 2 years from reasonable discovery 546(a)(1)/ 544 28 USC ' 3304(b)(1)(A) 28 USC ' 3306(b)(1) Fraudulent Transfer if USA is creditor 2 years 546(a)(1)/ 544 Fair Debt Collections Practices Act (AFDCPA@) 28 USC ' 3306(b)(3) 28 USC ' 3304(b)(2 Fraudulent Transfer if USA is creditor B specifically IRS 10 years 546(a)(1)/ 544(b) 26 USC ' 650214 26 USC ' 6501 Action for CERCLA damages 3 years for most 546(a)(1)/ 544 42 USC ' 9601 et seq 42 USC ' 9613(g) To Insider FDCPA The Federal Debt Collection Practices Act (AFDCPA@) is defined under 28 U.S.C. ‘ 3304. Trustees have read the FDCPA and discovered that it has a six-year Areach back@ or clawback period.15 Under the Bankruptcy Code, trustees incorporate the FDCPA with the Bankruptcy Codes ‘ 544(b) provision so that they may avoid transfers Aunder applicable [federal] law@ which includes the FDCPA=s 28 U.S.C. 3306; and, then avoid transfers occurring six years prior to the petition date. When receiving an action utilizing the FDCPA=s six-year clawback period, the courts are split. Section 330616 of title 28 provides that, A . . . the United States . . . may obtain (1) avoidance of the transfer obligation to the extent necessary to satisfy the debt to the United States . . .@17 When reviewing that language, one court wrote, AThe FDCPA does not contain a private right of action . . .[and] is a remedy for the exclusive use of the United States.@18 Another Argument Prohibiting Trustees to Use FDCPA Interestingly, when the FDCPA was enacted, it did include a provision that stated that the chapter A. . . should not be construed to supersede or modify the operation of (1) title XI19 . . .@20 No one can find legislative history to guide what it means not to Asupersede or modify@ bankruptcy. But, some courts conclude that the incorporation of the FDCPA into bankruptcy avoidance actions is A