Florida Residents Warned of Fraudulent Transfer Scams

What is a Fraudulent Transfer?

A fraudulent transfer is a transfer of property made to someone to avoid creditors. The person who received the money could be liable for those funds if it is a fraudulent transfer. Every fraudulent transfer and its recipients must be reported to the Florida Department of Financial Services and may be subject to fines and other penalties.

Florida residents should be aware of this because if they make a fraudulent transfer and the creditor can prove it in court, they may not be able to take advantage of certain bankruptcy protections like Chapter 7 and Chapter 13.

Chapter 726 of Florida Statutes

Florida residents may know that Florida Statutes, Chapter 726, covers fraudulent transfers. According to the statute, any property transfer is made to avoid creditors.

Every fraudulent transfer and its recipients must be reported to the Florida Department of Financial Services (DFA) and may be subject to fines and other penalties.

Before moving assets, have an attorney review your documents. An attorney will tell if there is anything wrong with the document before you sign it. By reviewing the document, they can identify any irregularities that could escalate into a fraudulent transfer scam and ensure that all debts are paid off before transferring assets.

Estate planning strategies to avoid fraudulent transfer claims

There are many ways to plan an estate to avoid fraudulent transfer claims. The first way involves making a trust and transferring assets into it, ensuring that the trust beneficiaries have the right to manage the assets and manage the distribution of those assets according to your wishes. Another way is to create a will and appoint a trustee who will distribute the assets according to the terms specified in your will after your death.

Legal professionals advise that advanced estate planning strategies should be implemented to avoid fraudulent transfer claims. They may also include the use of trusts, good faith beneficiaries, and lifetime gifts.

Challenging a Fraudulent Transfers Claim

The transfer or conversion of assets beyond a creditor's reach is not always fraudulent. Transfers made with an intention other than creditor avoidance are not illegal or reversible.

It is not illegal to move assets to a third party as long as the price being paid for it is fair. If this transpires, the creditor can levy or garnish whatever money the debtor receives, or has already received, cash or another asset of the same or higher values!

A transfer made for reasonable tax planning purposes is not considered a fraudulent conveyance because it protects the assets from being overtaxed. Transferring money into your retirement plan is smart. Doing so will ensure that you will have a secure financial standing when you are ready to retire.

The fraudulent transfer rules only apply to transfers and conversions of the debtor's assets that are not exempt from creditors' claims. If the debtor's assets are protected from creditors due to Florida statutes or the Florida constitution, he can transfer title. In other words, a debtor may not be held liable for a fraudulent conveyance purchased with exempt wages or social security proceeds.

Fraudulent Transfers Effect on Asset Protection

There has been a rise in fraudulent transfer scams in Florida in recent years. To avoid becoming a victim of these scams, it's important to know what a fraudulent transfer is and how it can affect asset protection.

A transfer that is considered fraudulent or "fraudulent as to a creditor" could give the person who received the property more power over it than they should have. For example, a debtor transfers assets to another person before filing for bankruptcy to avoid the possibility of having those assets seized by creditors. This type of transfer would be considered fraudulent to those creditors. Their ability to collect from those assets would now be restricted.

Suppose you face financial difficulty and may need help with managing your debts. In that case, you should consult an attorney before transferring any assets, as this could make you liable for legal consequences.

Get in touch with an attorney if you have questions about your situation

If you're not sure what constitutes a fraudulent transfer or you're experiencing any financial difficulty, consult an attorney. They will be able to advise you on the best course of action for your particular situation.

Additionally, if you owe money on a credit card, you could pay down the balance before transferring the money into another account. You want to make sure that any transfers you make are legitimate so that creditors have no reason to challenge them.