However, the question begs to be asked-how does one establish intent in court? After all, no defendant will readily admit to fraudulent intentions. Both acts basically still support the original intent of the Statute of Elizabeth that is, a transfer of assets is deemed to be fraudulent when the intent is to place them beyond a creditor’s lawful claim. In 2014, the UFTA was amended to become the UVTA (as mentioned above). There are currently 43 so-called uniform fraudulent transfer act states, including the District of Columbia and the U.S. The United States widely adopted UFTA in 1984. Though, in practice, we have yet to see such action pursued against any of our clients. That said, know that in some jurisdictions, there is a potential for criminal prosecution for fraudulent conveyance. This means, as a rule, you cannot go to jail if you commit a fraudulent transfer. It is sometimes referred to as fraudulent transfer or fraudulent conversion and, as stated, is mainly a civil, not criminal, matter. Simply put, a fraudulent conveyance is the transfer of assets by a debtor with the intent of placing such assets beyond the reach of a creditor’s just claim. Variances in statutes of limitations become even more pronounced when examining offshore jurisdictions.Ĭoncise Definition of Fraudulent Conveyance It is important to note that each state is empowered to determine the length of this fraudulent transfer lookback period, even if they adopt one of the uniform acts as a whole. Therefore, the creditor cannot ask the court to give them access to the assets as a means to satisfy a debt. Outside of this time period, any asset transfer is deemed legitimate. Within a specified time frame, a creditor can file a claim of fraudulent transfer against a debtor in court. England’s former colonies adopted it early on, which later became collectively known as the United States of America.Īmong other provisions, UFTA and UVTA, clearly set a statute of limitations on fraudulent conveyance claims. It is also sometimes referred to as the Statute of Elizabeth. English Parliament enacted into law as a way to give creditors a means to collect on legitimate debts from reluctant debtors. The origins of fraudulent conveyance legislation go all the way back to 16th century England. But US courts look for certain badges of fraud that, taken together, provide acceptable legal proof of a debtor’s intent to avoid payment of a debt. Proving intent in a court of law can be difficult. Thus, it more clearly conveys the meaning of the Act as providing merely a civil remedy. In fact, the Uniform Voidable Transactions Act ( UVTA) was recently accepted by the Uniform Law Commission as the successor to the Uniform Fraudulent Transfer Act, which replaces “fraudulent” with “voidable” in the title and body of the act. Under the Uniform Fraudulent Transfer Act (UFTA) adopted by many states a fraudulent transfer is a civil, not a criminal matter. Once this look-back period has expired, the courts will no longer consider a creditor’s fraudulent transfer claims against a debtor. So, the statute of limitations on fraudulent conveyance sets a time limit beyond which a legal opponent can no longer bring a fraudulent transfer claim. A statute of limitations is a written law specifying a time limitation on pursuing certain legal remedies. Fraudulent conveyance is the act of moving assets with the willful intention of placing them beyond the reach of a creditor who has a legitimate claim to them.
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