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Difference between revisions of "Fraudulent Conveyances and Fraudulent Preferences"
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Fraudulent Conveyances and Fraudulent Preferences (view source)
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== Summary of the law == | == Summary of the law == | ||
Many debtors actively try to avoid creditors’ claims against them, either legally (by an assignment in bankruptcy, for example) or illegally. This section briefly outlines the basic legal and ethical issues to watch for when clients ask “what if” questions. (See also the comments on ethics at the beginning of this publication.) | Many debtors actively try to avoid creditors’ claims against them, either legally (by an [[Assignments in Bankruptcy|assignment in bankruptcy]], for example) or illegally. This section briefly outlines the basic legal and ethical issues to watch for when clients ask “what if” questions. (See also the comments on ethics at the beginning of this publication.) | ||
=== Fraudulent conveyances=== | === Fraudulent conveyances=== | ||
Under the [http://canlii.ca/t/841z ''Fraudulent Conveyance Act''], disposing of property to delay, hinder or defraud creditors is illegal. The law still sees it as the debtor’s property and so allows creditors to continue to get at that property. | Under the [http://canlii.ca/t/841z ''Fraudulent Conveyance Act''], disposing of property to delay, hinder or defraud creditors is illegal. The law still sees it as the debtor’s property and so allows creditors to continue to get at that property. | ||
The most common disposal of property of interest to the ''Fraudulent Conveyance Act'' is the transfer of property to a relative, such as a spouse. If a husband and wife jointly own a house for many years and suddenly the husband transfers it to his wife just as a creditor begins a legal action against the husband, the transfer might be considered a fraudulent conveyance. Transferring chattels (personal, moveable possessions; see the section on Enforcing Judgments Against Chattels) under the same circumstances might also be considered fraudulent. | The most common disposal of property of interest to the ''Fraudulent Conveyance Act'' is the transfer of property to a relative, such as a spouse. If a husband and wife jointly own a house for many years and suddenly the husband transfers it to his wife just as a creditor begins a legal action against the husband, the transfer might be considered a fraudulent conveyance. Transferring chattels (personal, moveable possessions; see the section on [[Enforcing Judgments Against Chattels]]) under the same circumstances might also be considered fraudulent. | ||
If a creditor feels that a disposition was fraudulent within the meaning of the ''Fraudulent Conveyance Act'', it can bring a court action against the debtor and attempt to get at the asset as part of its enforcement steps. | If a creditor feels that a disposition was fraudulent within the meaning of the ''Fraudulent Conveyance Act'', it can bring a court action against the debtor and attempt to get at the asset as part of its enforcement steps. | ||
