The current law, UVTA (as of 2014) (formerly known as UFTA updated in 1979) has been enacted in 43 states (including Delaware), the District of Columbia, and the US Virgin Islands. Another famous case involving a transaction claimed to be voidable is known as Twyne’s Case (3 Coke 80b)Īdopted by 26 states (1918). In the common law tradition, fraudulent conveyances were first formally recognized under The Fraudulent Conveyances Act 1571 (13 Eliz 1, c 5), also known as the Statute of 13 Elizabeth. It is for this very reason that Asset Protection is best served cold. In most cases, after four years a transaction is not voidable. There is generally a limit to how far back a creditor may go to void a transaction. There is essentially a two pronged test to determine if an asset transfer is a fraudulent conveyance: 1) was the asset transferred without adequate consideration (sometimes called “constructive fraud”) UFTA, Sections 4(a)(2)(i), 4(a)(2)(ii), 5(a), and/or 2) was the asset transferred with the actual intent to hinder, delay or defraud any creditor (sometimes called “actual fraud”) UFTA, Section 4(a)(1). a Fraudulent Conveyance is most often determined pursuant to Uniform Voidable Transactions Act ( UVTA), until 2014 known as The Uniform Voidable Transfer Act of 1984, 11 USCA § 548 (“UFTA”). Notably, lawyers may also get caught up in the liability. It is important to note that a fraudulent conveyance can also result in a judgement against the person who first received the transferred property. A fraudulent conveyance may result in a creditor taking something you thought you had put out of harms way, but it won’t land you in jail. It only happens in court proceedings, either civil litigation or bankruptcy. Undoing such a transfer is a remedy implemented as a creditor’s right in debt collection actions. “Clawing back” a transaction is like pulling a nail out of a board with the claws of a hammer. In other words, the transfer can be undone or clawed back in order to satisfy a creditor’s claim. ![]() ![]() A fraudulent conveyance is an asset transfer that is voidable. ![]() First, a fraudulent conveyance has nothing to do with “fraud” per se.
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