What is the difference between fraudulent transfer and fraudulent conveyance?

Fraudulent transfer and fraudulent conveyance are two different legal actions related to asset protection law in New York. The two terms are often used interchangeably, but they have separate meanings. Fraudulent transfer occurs when a debtor transfers assets to another person, or entity, with the intention of preventing those assets from being seized by creditors. Fraudulent transfer laws exist to protect creditors from being misled. Some examples of fraudulent transfer would be a debtor selling off their assets for a much lower price than their true market value or gifting assets to another person or entity. Fraudulent conveyance, on the other hand, is when a debtor transfers assets to someone else as payment for a debt that already existed or was incurred to delay, hinder, or defraud creditors. A fraudulent conveyance is intended to put the assets beyond the creditors’ reach. An example of a fraudulent conveyance would be a debtor giving away their car to a friend as payment for a loan. In both cases, the law aims to protect creditors from being deceived by debtors. However, the two terms are distinct in that fraudulent transfer encompasses all transfers of assets with the intention to defraud creditors, while fraudulent conveyance only applies to transfers of assets made as a payment for an existing debt.

Related FAQs

What is a charging order?
What financial information do I need to provide for asset protection planning?
Are there any limitations on asset protection planning?
How can I protect my personal property?
What are the common uses for an asset protection trust?
Can creditors take money from an asset protection trust?
What is an inter vivos trust?
Is it possible to protect my assets from government seizure?
What is an LLC and how can it provide asset protection benefits?
Can I use an asset protection trust to protect my assets from lawsuit judgments?

What is the difference between fraudulent transfer and fraudulent conveyance?

Related FAQs

Related Blog Posts