![]() Typically, a defendant will transfer their property to another person to conceal it from creditors who will often attempt to obtain their property to pay their debt. These white collar crimes occur when anyone is attempting to avoid paying a large debt. The closely related California Penal Code 155 PC describes fraudulent conveyance by a judgment debtor. Penal Code 154 describes fraudulent conveyance by a debtor. In basic terms, if you are unable to pay your debts and attempt to avoid paying through fraudulent conveyances and property transfers, you could be face harsh penalties. The criminal offense “fraudulent conveyance” is defined under California Penal Code 154, which makes it a crime to give away or sell your property avoid a debt. Call us at (818) 888-2220, send an email inquiry to or visit us online at to learn more about the firm and to sign up for future newsletters.Fraudulent Conveyance Laws – California Penal Code 154 The attorneys at Glass & Goldberg in California provide high quality, cost-effective legal services and advice for clients in all aspects of commercial compliance, business litigation, and transactional law. If the property is stock in trade, such as the equipment of a business, with a value of greater than $250, then the crime is a felony, which presents the possibility of one year of jail time. This crime is a misdemeanor, punishable by a $1,000 fine or up to one year in jail or both. If the transaction remains undiscovered until more than four years later, creditors still have one year to undo it, provided that no more than seven years have passed since the transfer was made or the obligation was incurred.Ĭalifornia law makes it a crime to fraudulently sell, convey, assign, or conceal property with the intent to defraud, hinder, or delay a creditor of its rights, claims, or demands. Plaintiff-creditors have four years from the date of a voidable transfer to undo it. The debtor was insolvent at the time of the transfer or became insolvent as a result of the transfer.Did not receive a reasonably equivalent value in exchange for the transfer and.Thus, UVTA authorizes a creditor to void a transaction between a debtor and another party if the debtor: The claim is voidable whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred. (B) Intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor’s ability to pay as they became due. (A) Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction. The UVTA applies to transfers or obligations made or incurred with actual intent to hinder, delay, or defraud any of the debtor’s creditors where the debtor fails to receive a reasonably equivalent value in exchange for the transfer or obligation, and the debtor either was: The California legislature enacted the Uniform Voidable Transactions Act in 2015, which replaced similar legislation known as the Uniform Fraudulent Transfer Act. Typically, an action under the UVTA is available at any time a fraudulent transfer is discovered or reasonably suspected, and preferably the action is filed long before the debtor files for bankruptcy relief. Of course, this law applies to debtors in bankruptcy. Bankruptcy Code, since any recovery under UVTA benefits the plaintiff directly, while any recovery by the trustee under § 548 benefits the entire pool of unsecured creditors in the bankruptcy case. The procedures available under the UVTA are more advantageous than the provisions contained in § 548 of Title 11, the U.S. ![]() The UVTA only allows a creditor to undo a transaction where “reasonably equivalent value” was not received. ![]() It is important to note that California property owners are permitted to sell their property if they receive a commensurate price in return. In some circumstances, California law criminalizes transferring property with the intent to make it more difficult for a creditor to collect. ![]() Applicable transactions under the UVTA are voidable as to creditors. The UVTA supersedes the former the Uniform Fraudulent Transfer Act. In California, the Uniform Voidable Transfer Act (UVTA) provides some protection for creditors in this circumstance. Whether they are devious, desperate, or dishonest, some debtors trying to appear judgment-proof, will fraudulently conceal assets through some third-party transfer.
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