The Florida Uniform Fraudulent Transfer Act – How Can the Act Help You in Collecting on Your Judgment – South Florida and Central Florida Judgment Collection Attorney

The Florida Uniform Fraudulent Transfer Act – How Can the Act Help You in Collecting on Your Judgment – South and Central Florida Judgment (Including Out-of-State Judgments) Collection Attorney.

The Florida Uniform Fraudulent Transfer Act (“FUFTA”) is contained in Florida Statute §§ 726.101 – 201  FUFTA  provides creditors (judgment holders) with various forms of relief to avoid a debtor’s (defendant’s) fraudulent transfer of assets or funds.  A creditor (a plaintiff) may avoid a debtor’s transfer where the creditor shows that the transfer was made with actual intent to hinder, delay, or defraud.  To that end, FUFTA provides a non-exhaustive litany of factors – referred to as “badges of fraud” – to consider when determining whether a debtor’s transfer is fraudulent as to the creditor:

  1.   The transfer or obligation was to an insider.
  2.   The debtor retained possession or control of the property transferred after the transfer.
  3.   The transfer or obligation was disclosed or concealed.
  4.   Before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit.
  5.   The transfer was of substantially all of the debtor’s assets.
  6.   The debtor removed or concealed assets.
  7.   The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred.
  8.   The debtor was insolvent or became insolvent shortly after the transfer was made or the obligation incurred.
  9. . The transfer occurred shortly before or shortly after a substantial debt was incurred.
  10.   The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor.

The court may additionally consider any other factor it deems relevant and should look to the totality of the circumstances in determining actual fraud.  The existence of badges of fraud creates a prima facie case and raises a rebuttable presumption that the transaction is void.

FUFTA also allows a creditor to avoid a debtor’s transfer that is constructively fraudulent.  In order to establish a prima facie case for avoidance based on constructive fraud, the creditor must show that the debtor did not receive reasonable value for the transfer and either (1) the debtor was engaged or was about to engage in a business or transaction for which the debtor’s remaining assets were unreasonably small in relation, (2) the debtor intended to, believed, or reasonably should have believed that it would incur debt beyond what it could pay as the debt became due, or (3) the debtor was insolvent at the time of the transfer.

Please keep in mind that this article is for informational purposes only. It is not designed to be complete in all material respects. Moreover, there may be facts specific to your situation that would have to be considered to determine whether or not a fraudulent transfer has taken place.  Thus, if you have any questions relative to this post, please feel free to contact us.

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