Perhaps the most popular type of fraudulent conveyance is the transfer of property to an “insider” in anticipation of filing a Bankruptcy petition. A common example of a fraudulent conveyance to an “insider” is the sale of your car to your mother for $1 a month before you file for Bankruptcy.
One question that you may have when hearing the definition and the accompanying example is “How would they know?”. After all, you would probably acknowledge the fact that the transfer of your car to your mother for $1 immediately before filing looks bad, but you might wonder how they can show that you had the “actual intent” to defraud your creditor(s).
Well, the State of Florida, under its Uniform Fraudulent Transfers Act, laid out a list of factors that may be used to determine whether (or not) a transfer made that affected a creditor’s interest was done with “actual intent to hinder, delay, or defraud”.
Some factors, listed under Fla. Stat. § 726.105, include:
(a) The transfer or obligation was to an insider.
(b) The debtor retained possession or control of the property transferred after the transfer.
(c) The transfer or obligation was disclosed or concealed.
(d) Before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit.
(e) The transfer was of substantially all the debtor’s assets.
(f) The debtor absconded.
(g) The debtor removed or concealed assets.
(h) The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred.
(i) The debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred.
(j) The transfer occurred shortly before or shortly after a substantial debt was incurred.
(k) The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor.
If you are considering filing for bankruptcy protection in the State of Florida, and have concerns about any of the transactions that you have been involved with, contact Miami Bankruptcy Attorney Jeffrey Alan Aenlle at 1.786.309.8588 and we’d be happy to discuss your options with you.