What is fraudulent conveyance?

Fraudulent conveyance (sometimes called a “fraudulent transfer”) is a type of asset protection law found in North Carolina. It is used to prevent people from transferring their assets in an attempt to defraud creditors or avoid paying taxes. The law makes it illegal for individuals to transfer their assets without fair consideration, with the intent of preventing creditors from collecting on their debts or evading taxes. For example, if an individual owes money to a creditor, fraudulent conveyance laws prevent them from transferring their assets, such as money, property, or investments, to another person or entity without providing fair value in return. This is done in an effort to avoid paying what they owe. In this case, the transfer would be considered fraudulent and the court could take action to recoup the assets. Fraudulent conveyance laws also apply to tax avoidance. If an individual transfers their assets to avoid tax laws, this is also illegal. In this situation, the court could also recoup the assets and the individual may be subject to penalties and fines. Overall, fraudulent conveyance is designed to protect creditors and enforce tax laws in North Carolina. It makes it illegal for individuals to intentionally avoid paying their debts or taxes by transferring their assets without providing fair consideration.

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What is fraudulent conveyance?

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