Difference between revisions of "Fraudulent Conveyances and Fraudulent Preferences"

Fraudulent Conveyances and Fraudulent Preferences (view source)

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 === Fraudulent preferences===
-Under the [http://canlii.ca/t/8420 Fraudulent Preference Act], if a debtor cannot pay their creditors and makes a transfer or payment favouring one particular creditor, that transfer or payment is considered a fraudulent preference and is void. The debtor is said to have “preferred” that one creditor over the others. This situation is probably more likely to arise in commercial situations than in consumer situations. However, it may arise, for example, in situations where the debtor borrows money from a relative and pays off the relative but does not pay any other creditor.
+Under the [http://canlii.ca/t/8420 ''Fraudulent Preference Act''], if a debtor cannot pay their creditors and makes a transfer or payment favouring one particular creditor, that transfer or payment is considered a fraudulent preference and is void. The debtor is said to have “preferred” that one creditor over the others. This situation is probably more likely to arise in commercial situations than in consumer situations. However, it may arise, for example, in situations where the debtor borrows money from a relative and pays off the relative but does not pay any other creditor.
 If a creditor feels that a transfer is fraudulent according to the ''Fraudulent Preference Act'', it can bring a court action against the debtor and attempt to get at the money (or other asset) transferred as part of its enforcement steps.