If you suspect fraudulent transfers in a bankruptcy case, you may have to report the fraud and hope the trustee in the case comes to help you.

Q: How do I report a fraudulent bankruptcy after suing our seller? The seller gave all his assets to his kids then filed for bankruptcy so we couldn’t get any money awarded and have left us in the hole.

A: The bankruptcy code has provisions to protect creditors from debtors that decide to give all of their assets away, file for bankruptcy and avoid paying money to those people they owe money to. What you are describing are fraudulent transfers of assets to avoid paying creditors.

When a person files for bankruptcy an estate in bankruptcy is created. All of the assets of the person that filed are included as part of the bankruptcy estate. A trustee is appointed to handle the estate and to oversee those assets, pay creditors and take care of the estate while the case is in bankruptcy.

If a debtor hides assets, gives assets away, or takes other actions to avoid paying creditors, the trustee in the case is empowered to take action and recover those assets for the benefit of the creditors. In this case you must be a creditor with a claim against the person that filed for bankruptcy to take any action against the person you sued.

Just because you have a claim against the person in bankruptcy doesn’t mean that you’ll end up recovering anything. In fact, you may have to spend money in the bankruptcy case to force the trustee to go after those assets that have disappeared. Depending on the amount of money you are owed it may or may not be worth your time and money to go after the seller.

Talk to an attorney that has experience in bankruptcy cases to determine if the cost of pursuing the seller will be worth it. If the seller owes you fifty or one hundred thousand dollars, you might want to spend a bit of money to get what you are entitled. But if the seller is hiding five thousand dollars worth of assets, you may find that you will spend much more than that trying to recover anything from that person.

If you take matters into your own hands and navigate the complexities of the bankruptcy proceedings, you might be able to convince the trustee in the bankruptcy case to take some action. You can file an action for fraud as well in the case and attempt to avoid having your claim discharged in bankruptcy. Frequently, fraud claims that are successful in bankruptcy will survive the case and you can continue to pursue your claim against the seller well after his or her bankruptcy case is terminated.

But trying to do this on your own might be above what you can do and be successful at it.