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What is the 5-year clawback period in asset protection?

The 5-year clawback period, often associated with bankruptcy law, refers to a period of time preceding a debtor’s bankruptcy filing, typically starting from the date of the bankruptcy filing. During this period, a bankruptcy trustee has the authority to review, and potentially reverse certain transactions made by the debtor, such as preferential payments to specific creditors or fraudulent asset transfers. The purpose is to prevent debtors from attempting to shield assets from creditors by engaging in questionable financial transactions shortly before declaring bankruptcy.