What are the consequences of transferring property to protect it from creditors?

Full question:

How much trouble can you get into if one spouse transfers title of property, by whatever means, in order to protect that property?

Answer:

The Alabama Uniform Fraudulent Transfer Act aims to prevent debtors from transferring property to defraud creditors and hide assets. If a creditor believes a transfer was fraudulent, they can seek various remedies, including:

  1. Avoiding the transfer to satisfy the creditor's claim.
  2. Obtaining an attachment or provisional remedy against the transferred asset or other property of the transferee.
  3. Securing an injunction to prevent further disposition of the asset by the debtor or transferee.
  4. Appointing a receiver to manage the transferred asset or other property of the transferee.
  5. Any other relief deemed necessary by the court.

If a creditor has a judgment against the debtor, they may also execute on the transferred asset or its proceeds, if ordered by the court.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

The most common method for transferring ownership rights in real property is through a deed. A deed is a legal document that conveys title from one party to another. The two main types of deeds are warranty deeds, which offer guarantees about the title, and quitclaim deeds, which transfer whatever interest the seller has without any warranties. It's important to properly execute and record the deed to ensure the transfer is legally recognized.