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A Blog about Real Estate, How it Can Be Damaged, and Disputes Over its Transfer

This blog is a personal blog written to discuss legal issues affecting Georgia property, and how it is damaged, transferred, and fought over. I write this partly to keep abreast of the law, and partly to offer a forum for my writing. In order to find content, I often analyze Georgia Supreme Court decisions. I try to update this blog as I can, but writing is a time consuming process.

Wednesday, March 9, 2011

Creditors and Plaintiffs May Void Transfers of Property Intended to Defeat Creditors

In a case captioned Bishop v. Patton, the Georgia Supreme Court addressed Georgia's Uniform Fraudulent Transfer Act, O.C.G.A. Section 18-2-71, et al. (the "UFTA"),  in the context of the claims against a man who had murdered the relative of the plaintiffs.  The court examined the facts of the case under a multi-factored approach under the UFTA and upheld a trial court's injunction against further transfers of the contents of financial accounts, while reversing the trial court's preliminary injunction against further transfers of a house.

The UFTA is an act that prevents someone who owes money or is subject to a lawsuit or claim for money from hiding or secreting his assets or giving a person close to him a preference in or gift of the assets.  The law in Georgia was adopted by the Georgia General Assembly and codifies centuries of common law regarding what constitutes a fraudulent conveyance.   Without the law, any party or debtor could simply transfer their assets away in anticipation of being the subject of a claim or lawsuit and avoid a debt.

The opinion in Bishop, supra, contains a straight forward assessment of facts of a case applying the UFTA's factors, or "badges of fraud," to review a trial court's order under the statute.  Anyone thinking about transferring their assets to a relative or other person to avoid having to pay creditors should consult an attorney about the law before doing so.  The consequence of violating the statute may cause a plaintiff or creditor to sue the person to whom a potential defendant transfers an asset.

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