CLAWBACK PERIODS
The Burden of Proof Remains
Once the United States creditor exists, life is not necessarily easy. The trustee still must prove that
the transfer was without value or that there was a lack of solvency at the time of the transfer. With the
expanded time periods afforded by the FDCPA, evidentiary documents to establish proof become less
available. And, abstract concepts such as proving whether the debtor was engaged or was about to
engage in a business transactions which made payment to creditors implausible or whether the business
or transactions of the debtor made the debtor unable to pay debts when they became due37 B could
become oppressively burdensome to prove without the readily available documents.00
Conclusion
When planning for litigation, an exclusive review of 11 U.S.C. ‘ 546 leaves one to conclude that an
action must be filed within two years, and that the avoidable actions under 11 U.S.C. ‘ 547 or 548
would be limited to 90 days, one year or two years. However, alternative limitations= periods are
provided by 11 U.S.C. ‘ 544(b) which incorporates applicable law. Some courts have determined
544(b)=s Aapplicable law@ to include federal law. There is a split among courts as to whether or not
the Aapplicable law of 544(b) includes the six-year look back period under the FDCPA or the 10-year
period of 26 U.S.C. ‘ 6502(a)(1). One group of courts hold that the FDCPA is an exclusive remedy to a
governmenta