Fraudulent Transfer Archives - Wetherington Hamilton, P.A.

What is a Fraudulent Transfer?

March 6, 2017/in Articles, Debt Collection/by Ted Hamilton

Several years ago while looking for assets owned by a judgment debtor I discovered that he had recently transferred title to his Corvette to his daughter. It is unusual to find such an obvious example of a fraudulent transfer, but it was not difficult to recover the vehicle and apply it to the amount owed to my client.

Traditionally, a transfer of an asset is considered fraudulent if it is made to an “insider”, such as family member; for less than fair value; when the debtor had been sued or was threatened to be sued.

The law has also established other indicators that a transfer is fraudulent. These are known as “badges of fraud”. Some examples are: the debtor maintained possession or control of the asset; the transfer was concealed; or the transfer was of all of the debtor’s assets. Another example would be that a lien is created on property of the debtor, simply to keep it from being seized.

For corporate debts an officer who is in charge of a business may be held personally responsible if he pays himself before providing for payment to creditors. The officer is considered to hold property of the corporation “in trust” for payment to creditors of the corporation. If he pays himself and the corporation becomes insolvent, a creditor may try and recover against the officer personally. You often see it where it is clear that a business is about to go under and a person in charge of the business starts draining the assets, leaving the creditors out to dry.

Thomas K. Sciarrino Jr., Esq.

Debt Collection and Judgment Collection – Hiring an Experienced Attorney Counts

January 30, 2017/in Articles, Debt Collection/by Ted Hamilton

After having practiced law for over 25 years, you would think I would have seen everything. Yet, every day presents a new type of matter with slightly different facts from the others that have come across my desk. From the debtor who paid his $850 dollar debt with a box of quarters, to the interesting friend who paid the debt of his other friend after having been served at the nudist resort, each case is interesting in its own way. Each matter teaches us something new: A new way to deal with litigation, a new way that an individual or entity can try to hide assets, a new way to collect on a judgment. This experience helps us collect a judgment or collect a debt where other attorneys might find the judgment uncollectable.

Our experience lends itself to Judgment enforcement and debt collection when all seems lost. For example, one of our clients sold his business to someone who failed to pay the remaining amount due on a note for the sale of the business. After lengthy litigation in another state, a judgment entered in the case for over $200,000.00. The attorney in the other state called us to assist in collection of the judgment. The debtor had moved to Florida. (This often happens due to Florida’s unlimited homestead exemption). We immediately filed paperwork to localize the foreign judgment in Florida. (This made the Foreign Judgment a valid Florida Judgment). After taking the deposition of the debtor, we found that the debtor had supported his wife and paid his son extensive amounts over the years prior to entry of the judgment. All of his money had gone into his wife’s account or into a joint account. At this point, we sued the wife and son on a fraudulent transfer theory. After setting the wife and son for deposition and moving for a trial, we settled the case for a substantial amount.

Example after example exists where our experience has proven extremely valuable in judgment collection and judgment enforcement. Our firm handles debt collection, Judgment collection and other commercial litigation on a contingency or hourly basis depending on what works best for the client. If you have a debt that is due to you or a judgment that has gone uncollected, let us know. We can help! Please call Ted Hamilton, Kalei Blair or Thomas Sciarrino in our office or email info@whhlaw.com for more information.

Theodore J. Hamilton, Esq.

SHOW ME THE MONEY – The Cost of Fraudulent Transfers

May 8, 2015/in Articles, Debt Collection/by Ted Hamilton

Should I accept a payment or check from someone other than the individual or entity who owes the money?

Picture this scenario, it has likely happened to most of us. Someone owes you money for some reason, be it rent, paying a bill, paying back a note or any number of other reasons. When you get the payment, however, the person or company writing the check is unfamiliar to you. Someone else or another company, for whatever reason, is paying and you have no idea why. Most people don’t really care where the money comes from, you are just getting paid, that is what is important. In reality, however, under Florida law you may be subjecting yourself to an unwanted lawsuit by accepting these funds.

The Florida Uniform Fraudulent Transfers Statute make you potentially liable to creditors of a corporation or individual from whom you accept payment for amounts due to you from another person. For example, a contractor does work on a home owned by the president of a company, and then the company pays the contractor for this work. In this case, the contractor could be forced to turn this money over to creditors of the company if the company is having financial troubles at the time. In other words, the contractor could at some point, even up to four years later, be forced to pay back this money to the Company and its creditors.

In the example above, if the purpose of the payment was to hinder, delay, or defraud a creditor or if the Company didn’t get some type of value for the payment to you and the Company is on its last leg financially, the transfer could be fraudulent. This law applies regardless of whether you knew about the financial condition of the Company or not. If a creditor of the Company finds out about this payment to the Contractor, they might have to pay the money back or at the very least defend an expensive lawsuit.

The best course of action is not to accept payments on money due to you from anyone except the person who owes it to you. Checks from those who are not your client or who don’t owe the money should cause you to raise a red flag. If it happens all the time, you need to ensure you ask why these payments are coming from a different person or company. Due diligence in such a case will save you grief and an expensive attorney’s fee bill in the long run.

Ted Hamilton, Esq.

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Wetherington Hamilton, P.A.

Wetherington Hamilton, P.A.