Fraudulent Transfer
A fraudulent transfer occurs when a person or business transfers assets or money to another party with the intent to avoid paying debts or using them to hide assets. This usually happens when someone anticipates legal action or financial trouble and tries to make their assets less accessible to creditors. Courts can reverse these transfers if they determine they were made to defraud creditors, allowing creditors to recover what they are owed. Essentially, it's an illegal tactic to shield wealth from rightful claims.
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A fraudulent transfer occurs when a person or business deliberately moves assets to avoid paying debts or creditors. For example, if someone sells their house for a very low price to a friend just before filing for bankruptcy, this might be considered a fraudulent transfer. The law typically aims to prevent this kind of behavior to protect creditors and ensure that debts can be settled fairly. If a court finds a fraudulent transfer, it may reverse the transaction or hold the individual responsible for the original debts.