Am I part of bankruptcy fraud?

If you and your sister sold the home before she filed bankruptcy, she should have declared the sale and any of the proceeds on her bankruptcy schedules. If the home was sold after she filed bankruptcy, she may be OK. You should have no legal obligation as to any action she takes, or doesn't take, relative to her bankruptcy.

You are not filing bankruptcy therefore you are not providing the courts with falsified documentation, however it sounds as though your sister should seek legal counsel. Honest information should always be provided to the courts. If the court does find fraudulent transactions, the consequences can be harsh, resulting in sanctions, dismissal of the case and the trustee can take hold of any property that he or she may see fit.

Title 18 of the United States Code Section 152 addresses your question. Basically anyone who violates this code can be imprisoned up to 5 years and fined. You can contact the U.S. Trustee's office, if you feel a violation of this code has occurred. Please contact me if you have any further questions.

It is not clear if your sister had already filed for bankruptcy when the house was sold or if she filed after it was sold. It she filed after it was sold, then you are not really involved in anything since it is your sister's responsibility to disclose the transaction in her bankruptcy petition. If the house was sold after your sister filed for bankruptcy, then the sale may be void and she is committing fraud by selling estate property and maybe perjury by not disclosing it among other things. If that is the case, then you need to see a bankruptcy attorney immediately for a private consultation. A lot more information would be needed for an evaluation of the situation if the house was sold after your sister filed for bankruptcy.