If a creditor believes that a debtor has committed a fraudulent transfer, the creditor can pursue various judicial remedies.

Some of these remedies include:

• voiding the asset transfer in question
• garnishment against the transferee/recipient
• attachment against the transferred asset or other property of the transferee
• An injunction against further disposition of assets by the debtor or transferee
• appointment of a Receiver

The Uniform Fraudulent Transfer Act  (UFTA) adds weight to the remedies available to creditors.  Often the UFTA can serve as a strong deterrent against fraudulent transfers instead of a remedy to be applied after judgment.

If you would like more information about creditors’ rights relating to fraudulent transfers, or if you need assistance from an attorney, contact Windtberg & Zdancewicz to schedule an initial consultation.

The attorneys at Windtberg & Zdancewicz, PLC, provide Arizona residents and businesses with experienced legal representation in all collection matters.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance with your collection matters, please contact us at (480) 584-5660.

The terms fraudulent transfer and fraudulent conveyance refer to an attempt to avoid paying debt by transferring money or property to another person or company.

A fraudulent transfer can occur with actual fraud (with intent) or constructive fraud (where there is no fraudulent intent).  The difference between them is defined by the debtor’s intent.   Evidence of a debtor’s intent is difficult for a creditor to secure. To prove intent, the courts have developed “badges of fraud,” which the court will consider as evidence of fraud.

 

Badges of Fraud encompass:

▪       Debtor becoming insolvent because of the transfer

▪       Lack or inadequacy of consideration

▪       Family or insider relationship among parties to whom assets are transferred

▪       Retention of possession, benefits or use of property in question

▪       Existence of the threat of litigation

▪       Financial situation of the debtor at the time of, or after transfer

▪       Existence of, or a cumulative effect of, a series of transactions after the onset of debtor’s financial difficulties

▪       A general chronology of events

▪       Secrecy of the transaction in question

▪       Deviation from the usual method or course of business

In Arizona, several statutes pertain to fraudulent transfers; both the Uniform Fraudulent Transfer Act  (UFTA) and the Federal Bankruptcy Code address them also.  Fraudulent transfer law is widely applied today to challenge complex financial transactions as an attempt to avoid paying creditors.

If you would like more information about fraudulent transfers, or if you need assistance from an attorney, contact Windtberg & Zdancewicz to schedule an initial consultation.

The attorneys at Windtberg & Zdancewicz, PLC, provide Arizona residents and businesses with experienced legal representation in all collection matters.  We are experienced in creditor’s rights including garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases.  If you need assistance with your collection matters, please contact us at (480) 584-5660.