When someone who owes you money frustrates your efforts to collect by suddenly becoming cash poor, they may have committed a fraudulent transfer. This occurs when a debtor moves non-exempt assets to another person or entity to shield them from legitimate creditors. Fortunately, a remedy exists.
Illinois’ Uniform Fraudulent Transfer Act (IUFTA) lets creditors file a lawsuit in Illinois state court to challenge such transfers. If it finds the transfer fraudulent, the court may “unwind” it, causing the money or other property to be seized and to revert in ownership so the creditor can use it to satisfy debt. The court may also enter a money judgment against the recipient of the fraudulently transferred property.
Fraud may be involved when a debtor:
The IUFTA’s broad language includes many types of transfers that debtors can use to divest themselves of property in order to defraud creditors. The statute identifies two basic types of fraudulent transfers. One is a transfer made “with actual intent to hinder, delay, or defraud any creditor of the debtor.” The other is a transfer made “without receiving a reasonably equivalent value in exchange for the transfer or obligation” if certain other criteria are met.
To prove a claim under the IUFTA, a creditor must show that:
If you are a creditor encountering difficulty collecting a judgment because the debtor allegedly lacks the funds to pay it, a fraudulent transfer litigation attorney can trace suspect transactions and bring a well-pleaded IUFTA lawsuit to enforce your rights.