Fraudulent Conveyance Attorney
We know how to handle such complex legal cases
Mistakes involving the transfer of financial assets can have serious consequences, especially if the individual or business making such a transfer owes money to creditors or is in the process of filing for bankruptcy.
That’s why it’s critical that you have an attorney on your side who fully understands the fraudulent conveyance laws in your state. Whether you’re a debtor attempting to make a financial transfer or obtain compensation as a creditor, a lawyer well versed in bankruptcy law and business litigation can skillfully guide you through this complex legal process.
Our legal team at Eller Tonnsen Bach, LLC can help you every step of the way. We have years of experience representing professionals and businesses dealing with fraudulent conveyances in South Carolina and North Carolina. As a result, we’re familiar with the laws in both states, including South Carolina’s Statute of Elizabeth law. You can count on us when it matters most.
What is a fraudulent conveyance?
A fraudulent conveyance (sometimes referred to as a “fraudulent transfer”) is a financial transfer made by an individual or business intended to avoid paying a creditor, particularly in the case of a bankruptcy proceeding. For example, a business owner planning to file for bankruptcy may give money to a friend or relative in an effort to conceal such financial assets from creditors attempting to collect money owed by the business.
Federal laws that fall under the jurisdiction of the Securities and Exchange Commission (SEC) often apply to such cases. In addition, each state has its own fraudulent conveyance laws. Most of these laws are based on the Uniform Fraudulent Conveyances Act (UFCA), also known as the Uniform Fraudulent Transfer Act (UFTA). This law provides creditors with a mechanism for nullifying a transfer or requesting compensation from someone accused of making a fraudulent transfer to another person or business.
South Carolina fraudulent conveyances are covered mostly by the Statute of Elizabeth (officially known as “Statute of 13 Elizabeth,” South Carolina Code Section 27-23-10), a law that dates back to 1571 in England.
North Carolina fraudulent conveyances are governed by the North Carolina Fraudulent Transfer Act (North Carolina General Statutes, Chapter 39 Article 3A, which is also known as the Uniform Voidable Transactions Act).
What constitutes a fraudulent transfer?
Fraudulent transfers can cover a wide range and can often be subject to intense debate and significant differences in interpretation. Examples of fraudulent transfers are often divided into three, basic categories – actual fraud, constructive fraud and low value claims.
Actual fraud often involves allegations of a business or individual intentionally transferring assets to someone or another company in an effort to avoid paying a creditor. Creditors and others seeking compensation from the person or business often object to certain types of financial transfers, including:
- The sale of an asset to a friend, family member or fellow employee.
- The person or business selling or transferring the asset but maintaining control of the asset, especially if it is a business.
- The transfer or sale of an asset to a so-called “straw man,” someone who buys or takes possession of the asset at the request of the seller specifically so the seller can avoid paying creditors.
- Constructive fraud involves the person or business that owes money to creditors intentionally paying creditors less than the full amount owed to them.
Low value claims often involve a business or individual selling or transferring an asset (especially a business or property) to another individual or business far below the fair market value. For example, a business owner might sell their company to an employee for a few hundred dollars in an effort to prevent creditors from taking the business in a bankruptcy proceeding.
Proving that actual fraud took place can be challenging. However, it’s vital for either party involved in such legal proceedings to take such matters seriously right from the start. That’s why it’s important to talk to a lawyer to learn more about the available legal options for resolving such complex legal matters.
How can such cases be resolved?
There are many solutions to resolving disputes involving allegations of making a fraudulent conveyance. Such solutions include:
- Debtor or creditor presents evidence to the court presiding over the fraudulent conveyance that the transfer violated or adhered to the applicable state or federal bankruptcy or conveyance laws.
- Debtor provides evidence that the asset in question was sold for a fair market value.
- Creditor provides evidence that the asset was sold for below fair market value.
- Debtor provides evidence that the asset was sold or transferred before fraudulent conveyance or bankruptcy laws applied to the asset.
- Creditor provides evidence that the asset was transferred or sold after the applicable fraudulent conveyance laws apply.
- All parties involved negotiate a settlement agreement that resolves any outstanding debts the debtor owes to creditors.
It’s also important to remember that such solutions often need to be reached in a specified amount of time. That’s because certain deadlines often apply to fraudulent conveyances. These deadlines (known as statute of limitations) vary from state to state. In North Carolina, the deadline is 10 years from the date of a fraudulent transfer. The deadline in South Carolina is normally 3 years from the date of a fraudulent transfer.
Experienced attorneys understand the urgency and importance of resolving such legal matters in a timely manner. That’s why it’s important to have an experienced lawyer on your side who can address your legal issues promptly in a cost-effective manner.
How an attorney at our firm can help you
Navigating your way through the legal system, especially when it comes to fraudulent conveyances, can be extremely complicated. The smallest mistake – even innocent ones – can have significant consequences, especially for debtors dealing with creditors or bankruptcy protection.
Our legal team knows how to deal with such cases in South Carolina and North Carolina. Our knowledge and expertise comes from our extensive work on such legal matters. That’s why many professionals, business owners and Fortune 500 companies select our firm to handle their business litigation matter.
Discover what our dedicated attorneys can do for you. Contact our law firm and schedule an appointment with an attorney at one of our three office locations in South Carolina and North Carolina. We’re focused on the finding the right solution for your legal matter.