A more thorough explanation:

Fraudulent transfer or conveyance is a term used in bankruptcy cases. It refers to the transfer of property to another person for less than its actual value. This is done to hide the property from the bankruptcy trustee. For example, if a debtor signs over a car to a relative to keep it out of the bankruptcy estate, it is considered a fraudulent transfer.

When a transfer is deemed fraudulent, the trustee can recover the property and sell it to benefit the creditors. According to United States v. Frykholm, a conveyance is fraudulent when the debtor receives less than a reasonably equivalent value in exchange for the transfer or obligation. Additionally, the debtor must have been insolvent on the date of the transfer or become insolvent as a result of it.

Example 1: John owes a large amount of money to his creditors and is considering filing for bankruptcy. To avoid losing his expensive watch, he gives it to his friend for safekeeping. This is a fraudulent transfer because John transferred the watch for less than its actual value to hide it from the bankruptcy trustee.

Example 2: Sarah is facing financial difficulties and is considering filing for bankruptcy. She decides to sell her car to her sister for $1,000, even though the car is worth $10,000. This is also a fraudulent transfer because Sarah transferred the car for less than its actual value to hide it from the bankruptcy trustee.

These examples illustrate how a debtor may attempt to hide assets from the bankruptcy trustee by transferring them to someone else for less than their actual value. This is considered fraudulent and can result in the recovery and sale of the property to benefit the creditors.