What is a fraudulent transfer?

A fraudulent transfer is when someone gives or transfers property or money in an attempt to avoid paying a debt. In Texas, this is regulated under Creditors Rights Law. It is important to note that in order for a debt to be considered a fraudulent transfer, the debtor must have intended to avoid paying a debt at the time of the transfer. Examples of fraudulent transfers include transferring money or property to a family member or friend in order to avoid paying a debt. It can also include transferring property to another company owned by the debtor, or transferring real estate so that it cannot be sold to pay creditors. It may also include adding a new name onto an existing property deed to make it hard to identify who the legal owner is so that the asset cannot be seized or sold to pay off debt. Under Texas Creditors Rights Law, fraudulent transfers are illegal and can be reversed, and the debtor can be liable to their creditors for the full amount of their unpaid debts, including court costs, legal fees, and interest. Additionally, the creditor may be able to pursue criminal charges against the debtor. To avoid charges, the debtor should always disclose any transfers of property or money that may be considered fraudulent and pay their debts as agreed.

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