By Fredrick P. Niemann, Esq., a NJ Fraud Attorney
The NJ Uniform Fraudulent Transfer Act governs all transactions in the state of New Jersey. Surprisingly, many fraudulent transactions are those that you would not typically think of. For example, fraudulent transactions are not only those involving lying and deceiving, but also those in which a person transfers his/her property for little or no value to avoid collection by creditors. It is important to know the different types of fraudulent transfers under the Act so that you can avoid liability.
The New Jersey Uniform Fraudulent Transfer Act was created to protect creditors and prevent debtors from placing their assets out of the reach of their creditors. Under the Act, there are two main types of fraudulent transfer. The first, called “actual” fraud, involves a debtor whose intent is to “hinder, delay or defraud” their creditor. This is the typical fraudulent transfer that one is aware they will get in trouble for. The second type of fraudulent transfer under the Act is called “constructive” fraud. This involves a debtor transferring their property for little or no value while they are insolvent, leaving their creditors unable to collect. This category does not require an intent to defraud by the debtor and is often a common mistake committed by people during bankruptcy proceedings. Instances when a debtor is considered insolvent include when their debts are greater than the fair market value of their assets and when a debtor is unable to pay their bills as they become due.
People who simply do not know the law often mistakenly commit fraudulent transfers. It is important that you contact an experienced fraud attorney to avoid these situations, especially when dealing with insolvency issues or bankruptcy proceedings. Please contact Fredrick P. Niemann, Esq. if you have any further questions regarding fraudulent transfers. He can be reached at 855-376-5291 or by email at fniemann@hnlawfirm.com/.