![]() ![]() A creditor must establish that the Transferor actually intended to hinder, delay or defraud by a preponderance of the evidence as opposed to the criminal standard of proof of beyond a reasonable doubt. Was the transfer made with the actual intent to hinder, delay, or defraud a current or future creditor’s attempt to collect? If the answer is yes, the conveyance is an intentional fraudulent conveyance and the creditor prevails under UFTA Section 4(a)(1).If the answer to any of the four questions is yes, the transfer is a fraudulent conveyance. Under the UFTA, which is the law in the majority of states, determining whether or not a transfer is a fraudulent conveyance involves four separate questions. Determining a Transfer or Sale is a Fraudulent Conveyance Under State Law If a transfer violates the UFTA or UFCA, creditors can and often do pursue fraudulent transfer claims outside of bankruptcy. 548).Īlthough fraudulent conveyance claims are most commonly asserted by creditors and bankruptcy trustees in bankruptcy proceedings, nothing in the law limits fraudulent conveyance claims to bankruptcy proceedings. ![]() Section 548 of the federal Bankruptcy Code (11 U.S.C.state fraudulent transfer law, which generally follow the Uniform Fraudulent Transfer Act (“UFTA”) or the Uniform Fraudulent Conveyance Act (“UFCA”) and.Simply put, a transaction is a fraudulent conveyance if the transfer is not made for reasonably equivalent value and the debtor was insolvent (meaning, not able to pay his debts as they came due), rendered insolvent by the transaction, or intended to defraud, delay, or hinder a creditor’s attempts to collect on a debt.įraudulent transfers are governed by two separate bodies of law: Although historically a fraudulent transfer required a transfer to be made in bad faith, under modern law a good-faith transfer can still constitute a fraudulent conveyance. An example of a fraudulent transfer is an individual gift all his assets to a close friend in order not to pay his debts. A fraudulent conveyance, also called a fraudulent transfer, is a transaction where one party (“Transferor”) gives or sells for less than full value an asset to another party (“Transferee”), leaving the Transferor without sufficient assets to pay his obligations. ![]()
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