Consequently, a fraudulent transfer to a friend or family member may make that friend or family member a defendant in a creditor’s fraudulent transfer lawsuit. A creditor alleging fraudulent conveyance may sue not only the debtor transferor but also the transferee who received the property in order to undo the transfer. The Statutes provide several equitable remedies to assist the creditor’s collection of these converted assets including injunctions against further transfers, imposing a receivership on the assets, or imposition of a constructive trust. Fraudulent transfers may be undone and reversed by a court’s putting the property back in the debtor’s hands where the property becomes subject to the creditor collection process. However, Florida Statutes do provide courts limited equitable remedies to undo fraudulent transfers. Florida Statutes do not provide for additional damages against debtors and do not impose criminal fines or penalties. What is the consequence of making a fraudulent conveyance?įraudulent Conveyances are not prohibited by law and are not illegal. Fraudulent transfer laws are different in bankruptcy court because there are different rules under federal bankruptcy laws. Asset protection planning and transfers become immune from fraudulent conveyance suspicion four years after the planning takes place. Florida Statues provide that a creditor can sue to overturn a transfer or conversion up to four years after a conveyance was made or obligation incurred. A fraudulent conversion is a debtor’s conversion of non-exempt real or personal property subject to creditor attack to a different type of property, still owned by the debtor, which new property is exempt or immune from creditor attack. A fraudulent transfer is a debtor’s transfer of legal title to his real or personal property to a third party with the intent to hinder, delay or defraud a present or future creditor. The most important issue in any asset protection plan is whether or not the transactions constitute fraudulent transfers or fraudulent conversions (collectively, “fraudulent conveyance”) pursuant to Florida Statutes.
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