Basics of Fraudulent Transfer Law

While most gifts and transfers of money and other property may seem harmless enough at the time, they may give rise to liability for both the transferor and the recipient in certain circumstances. For example, if an insolvent individual transfers his or her home to a spouse either as an outright gift or in exchange for less than the property’s value, a creditor can attack the conveyance as a fraudulent (or voidable) transfer even in the absence of fraudulent intent. Known as “constructive fraud,” this contrasts with the more widely recognized “actual fraud” claim, in which an individual or business transfers property intending to hinder a creditor’s collection efforts. Both varieties of fraudulent transfer claims are used to recover assets to satisfy a creditor’s claim, typically a judgment obtained in an earlier lawsuit.

In recent years, the terminology commonly used to describe these claims has changed. Given that the debtor’s intent may be immaterial, use of the word “fraudulent” has given way to the broader adjective, “voidable.” This was formalized in 2016 when the Georgia Legislature amended the Georgia Uniform Fraudulent Transfers Act. As of July 1, 2015, the statute is now known as the “Uniform Voidable Transactions Act,” or UVTA. The amendment included several changes, but the fundamentals of these actions remain the same.

UVTA claims are asserted against the recipient—often an “insider”—to extend liability beyond the original person or entity liable for a debt. For an individual debtor, insiders include the person’s spouse and other family members, as well as business entities that the debtor owns or controls. For a corporate debtor, insiders include owners, officers, affiliates, subsidiaries, and the like.

Put Our Extensive Experience Handling Fraudulent Transfer Claims and Litigation in Your Corner

Fraudulent conveyance law is often overlooked or underemphasized even by experienced practitioners. Our attorneys have extensive experience pursuing and defending both types of fraudulent transfer claims in all stages of litigation—from pre-suit negotiation to trial to appeals in Georgia’s highest courts.

Jones & Walden LLC has litigated many fraudulent transfer cases, presenting unique and novel arguments in this ever-evolving practice area.

The existence of possible fraudulent transfer claims significantly impacts a party’s position, both in and out of bankruptcy. For this reason alone, we strongly encourage you to seek legal advice at the earliest possible opportunity when these issues arise.

If you would like to discuss your case with a skilled attorney at our firm, we encourage you to contact our office in Atlanta to set up a consultation. We can explain your rights and options as well as walk you through the process of resolving matters at hand. Call 678-701-9235 or contact us online to get started.