Fraudulent Transfers

Summary

This practice note discusses fraudulent transfer under the Bankruptcy Code and state law. A transfer of the debtor's property to another party in order to deter, hinder, or defraud a creditor or to unfairly place such property out of the reach of a creditor is a fraudulent transfer. In bankruptcy cases, a trustee is given the power to set aside or avoid these transfers under either federal law or state law. Section 548 of the Bankruptcy Code provides for the federal statutory basis to challenge fraudulent transfers. Section 544 of the Bankruptcy Code provides for the basis to challenge fraudulent transfers under applicable state statutory law.