What is the Uniform Fraudulent Transfer Act?

The Uniform Fraudulent Transfer Act (UFTA) is a body of law in Texas that specifies the conditions, consequences, and parameters of transferring property ownership for fraudulent purposes. UFTA is designed to protect creditors from fraud, in order to ensure their repercussions from a fraudulent transfer are minimized. Under UFTA, a creditor is any person, bank, or another entity which has loaned money to the debtor and has a right to repayment. A fraudulent transfer is any transfer of property that is made with the intent to make the debtor’s assets unavailable to creditors in order to avoid payment. When a fraudulent transfer occurs, the creditor can sue the debtor and any other party involved in the transfer. UFTA serves two functions. First, it sets up the requirements to prove fraudulent transfer, which includes showing all the elements of intent, transfer, and fraud. Additionally, UFTA outlines the process to set aside a fraudulent transfer. This process includes the court ordering the transfer to be reversed and the transferred property returned to the debtor. Additionally, the court may impose a penalty, or damages, on the debtor to compensate the creditor for the loss incurred from the fraudulent transfer. Ultimately, UFTA is designed to protect creditors from fraud and deception. It establishes a framework to determine if a transfer of property was fraudulent and, if so, sets out the procedures for punitive action to be taken against the perpetrator.

Related FAQs

What is joint tenancy?
What is a right of first refusal?
What is a servitude?
What is a deed of partition?
What is a deed of gift?
What are the various types of restrictive covenants?
What is an equitable servitude?
What is an easement?
What is a quiet title action?
What is a deed of exchange?

What is the Uniform Fraudulent Transfer Act?

Related FAQs

Related Blog Posts