What is a voidable transaction?

A voidable transaction is a transaction that appears legitimate but can be reversed or voided in court if challenged. This is because the transaction is not in the best interest of at least one of the parties involved. This is an important concept in creditors’ rights law in New York as it provides creditors with a way to protect their interests. A voidable transaction is a transaction that is not illegal but may have been entered into under fraud, misrepresentation, duress, mistake, or undue influence. In this situation, the parties involved are not held to the agreement and may seek to have the court void the transaction. In New York, a creditor who has a claim against the debtor may be able to void a transaction if it was made with the intention of hindering, delaying or defrauding the creditor. This is referred to as a “fraudulent transfer” and is one of the most common forms of voidable transactions. Voidable transactions in New York are also referred to as “voidable preferences” and include transactions where a debtor transfers assets to a single creditor with the intention of avoiding paying other creditors. In any of these cases, creditors’ rights law allows the creditor to take legal action to void the transaction and reclaim the assets that were transferred. This helps to protect the creditors’ rights and ensures that the debtor’s assets are distributed fairly amongst all of his or her creditors.

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What is a voidable transaction?

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