Cut-off date (fristdag)
Also known as reference date, skæringsdag
The cut-off date is the reference date that determines which transactions can be set aside — typically the day the bankruptcy petition is filed.
Key facts
- Typically
- The day of the petition
- Determines
- Avoidance periods
In practice
The cut-off date is the zero point of a bankruptcy. All avoidance periods are counted from it, and it determines which payments and security interests can be clawed back into the estate.
For a creditor this is not merely theory. If you have received an unusually large payment from a customer shortly before their bankruptcy, the trustee can demand it back. And the other way round: if another creditor received it, you may have an interest in seeing it set aside.
Where it commonly goes wrong
- A payment received is assumed to be safe. If it falls within the critical period before the cut-off date, it can be set aside.
- An unusual payment is accepted without noting why. If it is challenged, your documentation decides whether it was ordinary.