11 usc fraudulent conveyance1/7/2024 ![]() ![]() Family RelationshipsĪ conveyance by one spouse to the other based upon a fictitious or nominal consideration is generally treated as fraudulent if it is made to defeat the spouse's creditor's claims. If a voluntary conveyance renders a debtor insolvent or leaves the debtor without the means of paying the debts existing at the time of the conveyance, it is fraudulent and without any legal effect, regardless of the intent of the parties. Another example is if the transfer included virtually all of the debtor's assets. The failure to record a conveyance, such as a deed to land, might indicate the existence of fraud. Such rules are called "badges of fraud." For example, if the Transfer of Assets was concealed, an inference of Fraud can be made. Because it may be difficult for the courts to determine an individual's intent, rules have been established to help in the process. Whether a transaction constitutes a fraudulent conveyance depends upon the existence of the intent to defraud at the time that the challenged transfer was made. Just because an individual in debt makes a conveyance of his or her property does not mean that it is a fraudulent conveyance. In many jurisdictions, a court will not set aside the conveyance if the debtor owns property, other than that which has been fraudulently conveyed, that is sufficient to pay the debt. ![]() A judgment is usually required to show with certainty the existence of a valid and enforceable debt, but it can be dispensed with, depending upon the particular circumstances of the case. Generally, the individual must acquire a lien (a right or claim) or a judgment (a court decision) against a debtor's property. Most states have adopted some version of either the Uniform Fraudulent Transfer Act (UFTA) or the older Uniform Fraudulent Conveyance Act (UFCA). This is a fraudulent conveyance that can be set aside by the court at the request of the defrauded creditor.A creditor who seeks to set aside a fraudulent conveyance must comply with state statutes. He informs the relative that he has not relinquished ownership of the funds, but merely wants to isolate the money from the reach of his creditors. A transfer of property that is made to swindle, hinder, or delay a creditor, or to put such property beyond his or her reach.įor example, a man transfers his bank account to a relative by putting the account in the relative's name. ![]()
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