"Fraudulent Conveyance" Defined & Explained


A conveyance of property without any consideration of value, for the purpose of delaying or bindering creditors. Such a transfer will, when proven to the satisfaction of judge or jury, be declared void.

Although such conveyance is void as regards the purchaser and creditors, it is valid as between the parties and usually valid as to subsequent innocent purchasers. For example, one company may transfer a house to a related company to avoid a judgement giving the house to a 3rd party. However, subsequent innocent purchases/transfers of the house will often be valid.



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