Fraudulent Transfers – It happens to the best of us
When people hear the term fraud, they think of white-collar criminals and Ponzi schemes. They also think of scam callers. However, one of the most common roadblocks in filing bankruptcy is a type of fraud people usually don’t expect: “a fraudulent transfer.” Today, we’ll look at “fraudulent transfers” and break down what they could mean for you.
What exactly is a fraudulent transfer?
A fraudulent transfer happens when a debtor transfers property intending to hinder, delay, or defraud creditors or makes a transfer for below the fair market value within a certain time frame (usually two years) before filing bankruptcy.
The first part seems obvious: if you transfer property, try to hide it from creditors, and then file bankruptcy, yes, that’s fraud. What about the second part of the fraud?
How often have you sold or given something away to a family member or friend at a discount? What if your ex removes your name from the title of a car? How about refinancing your home and taking your name off the title?
All these situations could create potential issues if you’re considering filing for bankruptcy.
In bankruptcy proceedings, fraudulent transfers are typically challenged by creditors or the bankruptcy trustee. If a court finds that a transfer was fraudulent, the transfer may be reversed or set aside, allowing the property or assets to be used to satisfy the debtor’s obligations to creditors.
What can I do?
The good news is that a fraudulent transfer doesn’t necessarily mean bankruptcy is out of the question. We can help you find the best solution to deal with fraudulent transfers.
