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Help! My debtor transferred property to relatives to avoid paying

On Behalf of | Jan 25, 2023 | Aggressive Collections, Experienced Debt Collectors

While most people try to pay their debts, some debtors are dead set against paying their bills. They may think they can get away with it if they wriggle hard enough.

One way some debtors try to get out of paying their bills is to transfer all their valuable property to friends or relatives. That way, if you sue them you can’t find any assets to attach and seize, right? They keep control of the property and creditors can’t get at it.

That’s the idea, and it can even work. It’s not always easy to spot this form of misconduct. When you find out, or reasonably should have found out about it, you only have four years to sue to reverse it.

We can sue to reverse the transfer. Under Massachusetts law, any transfer of property with the intent to hinder, delay or defraud a creditor is called a “fraudulent conveyance.” At the Law Offices of Alan M. Cohen & Associates LLC, we know how to get fraudulent conveyances reversed so you may get paid.

Hallmarks of fraudulent property transfers

Naturally, a transfer is fraudulent if the debtor actually intended to hinder, delay or defraud their creditor, but that can be hard to prove directly. However, the courts are usually willing to rule that a transfer was fraudulent when the circumstances indicate it was. Courts weigh all relevant factors to determine the debtor’s intent. For example:

  • Was the transfer to an insider? (Or to a third party who transferred the assets to an insider)
  • Did the debtor retain possession or control over the property after the transfer?
  • Did the debtor receive equivalent value in exchange for the transfer?
  • Did the debtor conceal the transfer or obligation?
  • Had the debtor been sued or threatened with suit just before the transfer was made?
  • Did the transfer amount to substantially all of the debtor’s assets?
  • Did the debtor remove or conceal assets?
  • Was the debtor insolvent shortly after the transfer was made?
  • Did the transfer occur shortly before or after a substantial debt was incurred?

These are all factors the court will consider, but they are not the only factors. Anything that tends to show your debtor transferred assets in an effort to thwart collections is fair game.

Once the court determines the transfer was fraudulent, it may rule that the transfer is invalid. It will be as if the transfer never happened. That means the assets are now available for you to have seized and sold for payment of the debt.

Please call 508-763-6604 now or reach out using our online form to schedule an appointment to learn about our services locating and setting aside fraudulent transfers.