When first faced with the possibility of being sued many people’s first reaction is to transfer their assets to someone else or to a legal entity. A common question is whether such a transfer later found to be a fraudulent conveyance may increase the debtor’s liability for money damages. The…
Selling an exempt homestead in one state in order to move in to a new Florida homestead can be tricky. One must be careful to preserve the protection of current homestead while it is on the market and also protect a Florida property that is purchased before the old home…
Generally, when a spouse who is subject to a money judgment transfers his separate property to joint ownership with his non-debtor spouse, the transfer is subject to challenge as a fraudulent conveyance. The issue is complicated when the debtor spouse deposits money he earned himself in to a pre-existing joint…
Often, clients facing a significant judgments ask me whether they should divorce their spouse for asset protection. They consider a legal divorce in which their non-debtor spouse would receive all of the debtor’s non-exempt assets. The issue is whether a court’s divorce decree immunizes the debtor and his ex-spouse from…
Fraudulent transfer law casts a big net, and courts will undo almost any transfer that is clearly intended to avoid present or even future unknown creditors. In this case, a California appellate court reversed a transfer of assets to a Nevada asset protection trust four years prior to a creditor’s…
Here’s is an interesting case where a bankruptcy trustee sued the U.S. government for their receipt of a fraudulent transfer. Within two years of filing bankruptcy a company, taxable as an S-Corp, paid the IRS money to satisfy their owners’ tax liability attributable to company income. The bankruptcy trustee argued…
A Florida married debtor deposits paychecks payable to himself into a tenants by entireties bank account; is the deposit into the entireties account a fraudulent transfer when the debtor’s wages are exempt from garnishment?
When is a debtor’s conveyance of non-exempt money to a charitable organization a fraudulent transfer? Does the debtor’s charitable intent immunize the debtor from allegations of an intent to defraud his creditors?
A recent bankruptcy court decision addressed the issue of whether people who assist a debtor’s pre-bankruptcy fraudulent transfers can be held liable for damages in the bankruptcy proceeding. In this case, a trustee hired to liquidate debtor property filed a complaint pursuant to Section 544(b) of the Bankruptcy Code against…
A creditor cannot levy upon or freeze your assets until the creditor obtains a civil judgment against you. The creditor cannot go after your assets just because he has filed a lawsuit and you are defending the suit. That is the general rule.
