Texas law prohibits a debtor who is subject to a valid judgment from moving assets out of reach of creditors in order to hinder, delay, or defraud a judgment creditor. This legal restriction applies even if the transfer takes place before the entry of a judgment against them. A fraudulent transfer is voidable under Texas law. So, one may ask, shat is a fraudulent transfer? The Texas Uniform Fraudulent Transfer Act (TUFTA) supplies an answer.
Texas Uniform Fraudulent Transfer Act (TUFTA)
The Texas Uniform Fraudulent Transfer Act (TUFTA) prohibits a debtor from defrauding creditors by placing assets beyond their reach. The TUFTA provides creditors with legal recourse when a debtor engages in a fraudulent transfer. Where a debtor engages in a fraudulent transfer,[1]a creditor may void the transfer.
What Is a Fraudulent Transfer?
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