Simple English definitions for legal terms

fraudulent transfer

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A quick definition of fraudulent transfer:

Term: Fraudulent Transfer

Definition: Fraudulent transfer is when someone gives away or sells something for less than it is worth to hide it from the people they owe money to. For example, if someone gives their car to a family member to keep it from being taken by the people they owe money to. If this happens, the person who is owed money can try to get the thing back and sell it to pay off the debt.

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.

fraudulent misrepresentation | Fraudulent Transfer Act


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Hi! I’m a rising 3L at GULC who transferred and is in big law now. Does anyone have any questions lol
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@georgiapeach88: Where did you transfer from? And why did you transfer?
Oh, I see from your profile: Maryland. Still, why did you transfer?
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@georgiapeach88: I actually remember you from some of the first times I was on this site
Just out of curiosity: Do we think it's fair to say that the percentage of users of those site who continue to use it after their 1L starts, for those users who actually went or go to law school, is <1%?
@georgiapeach88: not sure if you're still there but im also curious bout why you transferred, especially since your application says you were eventually admitted to GULC off the waitlist?
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@BelligerentMagicalWarthog: last year they were accepting people off the waitlist from mid june up to a few days before classes start. so just off that and vibes I don't think they're done
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@BelligerentMagicalWarthog: anecdote but a friend of mine got off the gulc waitlist in July last year
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