Fraudulent Conveyance & Preferences
 

Fraudulent Conveyances and Preferences 

Fraudulent Conveyances and Preferences are forms of Adversary Proceedings. A fraudulent conveyance can generally be described as a transfer of property from a person prior to their filing for bankruptcy protection to a third party for no or inadequate consideration (such as a gift). The statute of limitations for a fraudulent conveyance action is 6 years. The typical fraudulent conveyance action consists of a Trustee suing the recipient of the transfer. A preference is generally a transfer of property by a debtor to a creditor on account of an old debt, while the debtor was insolvent, within 90 days of the filing of the bankruptcy petition to an unrelated creditor or within 1 year to a related creditor (insider) that enables that creditor to receive more money or property than they would have received if the transfer had not been made. The typical preference action also consists of a Trustee suing the recipient of the transfer. An individual contemplating filing for bankruptcy protection should not make fraudulent conveyances or preferential transfers.