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MIAMI A
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Warning
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LSDefine
Simple English definitions for legal terms
fraud on creditors
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A quick definition of fraud on creditors:
Fraud on creditors is when someone tries to hide or give away their property to avoid paying back money they owe to someone else. This is also called a fraudulent conveyance. It's like cheating because they are trying to keep their things safe from the people they owe money to. This is not allowed and is against the law.
A more thorough explanation:
Definition: Fraud on creditors refers to a fraudulent conveyance, which is a transfer of property for little or no consideration, made with the intention of hindering or delaying a creditor by putting the property beyond their reach. It is a transaction where the owner of real or personal property tries to place the property out of the reach of creditors.
Example: John owes a large sum of money to his creditors. To avoid paying them, he transfers his house to his brother for a nominal amount, which is much less than the actual value of the property. This transfer is a fraudulent conveyance or fraud on creditors because John is trying to put his property beyond the reach of his creditors.
Explanation: In this example, John is trying to avoid paying his creditors by transferring his property to his brother for a nominal amount. This transfer is fraudulent because John is trying to hide his assets from his creditors. By doing so, he is hindering or delaying his creditors from collecting the money he owes them. This is an example of fraud on creditors.