Uniform Fraudulent Transfer Act
The Uniform Fraudulent Transfer Act was adopted in California for all transfers and obligations occurring on or after January 1, 1987, providing unsecured creditors remedies against debtors who have made transfers and incurred obligations that have the effect of placing assets beyond the reach of the creditors.
The court will use all relevant evidence to determine if there has been a fraudulent transfer including:
- "the transfer was to an insider"
- "the debtor had retained possession or control of the property transferred,"
- "the transfer or obligation was disclosed or concealed,"
- "the debtor was sued or threatened with suit before the transfer was made or the obligation incurred,"
- "the transfer was of substantially all the debtors assets,"
- "the debtor has absconded,"
- "the debtor had removed or concealed assets,"
- "the value of consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred,"
- "the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation incurred,"
- "the transfer had occurred shortly before or shortly after a substantial debt was incurred," or,
- "the debtor had transferred the essential assets of the business to a lien or who had transferred the assets to an insider of the debtor."
[Cal. Civ. Code § 3439.04]
NOTE: California provides both civil and criminal penalties against a debtor who fraudulently moves property out of the state with the intent to defraud that can range up to $1,000 or 1-year imprisonment or both. [Cal. Penal Code § 154(a)] If the property transferred is greater than $100 then the crime is a felony. [Cal. Penal Code § 154(b)]