Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.
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The transfer of property to the LLC could be considered a fraudulent conveyance and set aside in a bankruptcy.
Here is why.
A transfer of the debtor’s assets to a third party, with the intent to prevent creditors from reaching the assets to satisfy their claims, is called a “fraudulent conveyance”. Bankruptcy Code §548 provides for the avoidance of fraudulent transfers within two years before the bankruptcy filing date. Transfers to self settled trusts and similar devices are subject to a longer avoidance reach back (10 years). Bankruptcy Code §548 is attached in full:
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