It is possible to successfully defend allegations that you fraudulently transferred assets to avoid creditors. Take the case, for example, of Thomas J. Meyer who filed bankruptcy in Illinois.The bankruptcy trustee alleged Meyer conveyed assets to his wife within one year of filing bankruptcy to evade creditors and the bankruptcy trustee. Mr. Meyer said the transfers were part of estate planning and were done on the advice of his estate planning attorney. The court found in Mr. Meyer’s favor. The court said that the bankruptcy trustee had to prove that Mr. Meyer intended to make transfers to defeat creditors.
As matter of fact, the court was convinced that the reason Mr. Meyer transferred assets to his wife was because his wife had just lost her job and had become pregnant; the transfers were designed to protect his wife financially by putting sufficient assets in her name. The judge also accepted Mr. Meyer’s explanation that the transfers were made in part upon the advice of his estate planning attorney who suggested balancing the ownership of assets between Meyer and his wife. Also, the court noted that all transfers were fully disclosed on the debtor’s bankruptcy schedules which showed good faith. The court did not find sufficient evidence that Mr. Meyer’s transfers of non-exempt assets were designed to hinder, delay or defraud his creditors.