Define: Fraudulent Transfer

A fraudulent transfer, also known as a fraudulent conveyance, refers to the illegal transfer of property or assets to another party with the intent to hinder, delay, or defraud creditors. These transfers are typically made when the debtor is insolvent or facing financial difficulties and seeks to shield assets from creditors or avoid paying debts. Fraudulent transfers can take various forms, including transferring assets for less than fair market value, transferring assets to family members or associates, or transferring assets to entities controlled by the debtor. The goal of fraudulent transfer laws is to prevent debtors from unfairly depriving creditors of their rightful claims and to ensure the equitable distribution of assets among creditors in cases of insolvency.

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This glossary post was last updated: 29th March 2024.