A fraudulent transfer (previously known as a fraudulent conveyance) occurs when a debtor transfers property or assets to another person or entity for the purpose of preventing a creditor from collecting on a debt. In many cases, the telltale sign is that the property is transferred to a friend or family member for far less than what would be considered a reasonable sale, given the value of the asset.
If you are a debtor accused of making a fraudulent transfer or a creditor frustrated by a transfer that you believe is improper and prevents you from collecting on the funds you are owed, one of our experienced civil litigation attorneys at the Kridel Law Group can help you protect your rights.
THE UNIFORM FRAUDULENT TRANSFER ACT
The Uniform Fraudulent Transfer Act (UFTA), enacted by the New Jersey State Legislature in 1988 to be effective January 1, 1989, defines a fraudulent transfer as the conveyance of assets to another for the purpose of placing them beyond the reach of creditors, both present, and future.
FRAUDULENT TRANSFERS AND EXISTING JUDGMENTS
Under the law, the creditor does not need to be awarded a judgment in order to file a complaint alleging the transfer to be fraudulent. However, if a transfer takes place after a judgment has been entered, the debtor may potentially face an additional cause of action for fraudulent interference with judgment collection efforts.
DEFENSES TO FRAUDULENT TRANSFER ALLEGATIONS
Anything that might establish, for the Court, that the transfer was made in good faith, for reasonably equivalent value, and/or without the intent to defraud the creditor might serve as a defense to a fraudulent transfer claim. Some of the more common defenses include subsequent payment of the debt for the value of the property transferred, discharging the debt in question through bankruptcy proceedings, and asserting that the claim is time-barred.
CONSULT AN EXPERIENCED DEBTORS' AND CREDITORS' ATTORNEY IN NEW JERSEY
The time limit for filing a fraudulent transfer claim varies depending on whether the transfer is alleged to be fraudulent with respect to present or future creditors. For this reason, it is important that creditors who believe they have a claim to transferred assets consult an experienced creditors' attorney as soon as possible, in order to protect any potential claim. Similarly, a debtors' attorney who is familiar with the appropriate defenses to raise against fraudulent transfer allegations is crucial, as this is an extremely complex area of law.
Regardless of whether you are a creditor seeking to recoup a debt you are owed or a debtor who needs to mount a strong defense against fraudulent transfer allegations, one of our experienced debtors' and creditors' attorneys in New Jersey can guide you through the process. Contact us at (973) 470-0800 or [email protected] to schedule a consultation today.