Indiana Voidable Transaction Statutes

Indiana State IndianaVoidableTransactionUVTAFraudulentTransferUFTA



Indiana Uniform Voidable Transfers Act

Indiana UVTA a/k/a IUVTA or INUVTA
In. Code 32-18-2-1

{ Check Currency - Current Only As Of January 1, 2020 }

32-18-2-1 Applicability of chapter

Sec. 1.

(a) This chapter applies to all transfers made and obligations incurred after June 30, 1994.
(b) This chapter does not apply to a transfer made or an obligation incurred before July 1, 1994.

32-18-2-2 Definitions

Sec. 2.

The following definitions apply throughout this chapter:

(1) “Asset” means property of a debtor, but the term does not include:
(A) property to the extent that it is encumbered by a valid lien;
(B) property to the extent that it is generally exempt under nonbankruptcy law, including property exempt from execution under IC 34-55-10; or
(C) an interest in property held in tenancy by the entireties to the extent it is not subject to process by a creditor holding a claim against only one (1) tenant.
(2) “Claim”, except as used in “claim for relief”, means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured.
(3) “Creditor” means a person that has a claim.
(4) “Debt” means liability on a claim.
(5) “Debtor” means a person that is liable on a claim.
(6) “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
(7) “Lien” means a charge against or an interest in property to secure payment of a debt or performance of an obligation, and includes a security interest created by agreement, a judicial lien obtained by legal or equitable process or proceedings, a common law lien, or a statutory lien.
(8) “Organization” means a person other than an individual.
(9) “Person” means an individual, an estate, a partnership, an association, a trust, a business or nonprofit entity, a public corporation, a government or governmental subdivision, agency, or instrumentality, or another legal or commercial entity.
(10) “Property” means anything that may be the subject of ownership.
(11) “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or another medium and is retrievable in perceivable form.
(12) “Sign” means, with present intent to authenticate or adopt a record:
(A) to execute or adopt a tangible symbol; or
(B) to attach to or logically associate with the record an electronic symbol, sound, or process.
(13) “Transfer” means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, license, and creation of a lien or another encumbrance.
(14) “Valid lien” means a lien that is effective against the holder of a judicial lien subsequently obtained by legal or equitable process or proceedings.

32-18-2-12 Insolvency

Sec. 12.

(a) For purposes of this section, assets do not include property that has been:
(1) transferred, concealed, or removed with intent to hinder, delay, or defraud creditors; or
(2) transferred in a manner making the transfer voidable under this chapter.
(b) For purposes of this section, debts do not include an obligation to the extent it is secured by a valid lien on property of the debtor not included as an asset under this section.
(c) A debtor is insolvent if, at a fair valuation, the sum of the debtor’s debts is greater than the sum of the debtor’s assets.
(d) A debtor that is generally not paying the debtor’s debts as they become due, other than as a result of a bona fide dispute, is presumed to be insolvent. This presumption imposes upon the party against which the presumption is directed the burden of proving that the nonexistence of insolvency is more probable than its existence.

32-18-2-13 Value given for transfer or obligation

Sec. 13.

(a) Value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or an antecedent debt is secured or satisfied. Value does not include an unperformed promise made otherwise than in the ordinary course of the promisor’s business to furnish support to the debtor or another person.
(b) For purposes of sections 14(a)(2) and 15 of this chapter, a person gives a reasonably equivalent value if the person acquires an interest of the debtor in an asset through a regularly conducted, noncollusive foreclosure sale or execution of a power of sale for the acquisition or disposition of the interest of the debtor upon default under a mortgage, deed of trust, or security agreement.

32-18-2-14 Transfers voidable as to present and future creditors

Sec. 14.

(a) A transfer made or an obligation incurred by a debtor is voidable as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:
(1) with actual intent to hinder, delay, or defraud any creditor of the debtor; or
(2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:
(A) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or
(B) intended to incur or believed or reasonably should have believed that the debtor would incur debts beyond the debtor’s ability to pay as the debts became due.
(b) In determining actual intent under subsection (a)(1), consideration may be given, among other factors, to whether:
(1) the debtor retained possession or control of the property transferred after the transfer;
(2) the transfer or obligation was disclosed or concealed;
(3) before the transfer was made or the obligation was incurred, the debtor had been sued or threatened with suit;
(4) the transfer was of substantially all the debtor’s assets;
(5) the debtor absconded;
(6) the debtor removed or concealed assets;
(7) the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred;
(8) the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred; and
(9) the transfer occurred shortly before or shortly after a substantial debt was incurred.
(c) A creditor making a claim for relief under this section has the burden of proving the elements of the claim for relief by a preponderance of the evidence.

32-18-2-15 Transfers voidable as to present creditors

Sec. 15.

(a) A transfer made or an obligation incurred by a debtor is voidable as to a creditor whose claim arose before the transfer was made or the obligation was incurred if:
(1) the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation; and
(2) the debtor:
(A) was insolvent at that time; or
(B) became insolvent as a result of the transfer or obligation.
(b) Subject to section 12(d) of this chapter, a creditor making a claim for relief under this section has the burden of proving the elements of the claim for relief by a preponderance of the evidence.

32-18-2-16 When transfer is made or obligation incurred

Sec. 16.

The following apply for purposes of this chapter:

(1) A transfer is made:
(A) with respect to an asset that is real property other than a fixture (but including the interest of a seller or purchaser under a contract for the sale of the asset), when the transfer is so far perfected that a good faith purchaser of the asset from the debtor against whom applicable law permits the transfer to be perfected cannot acquire an interest in the asset that is superior to the interest of the transferee; and
(B) with respect to an asset that is not real property or that is a fixture, when the transfer is so far perfected that a creditor on a simple contract cannot acquire a judicial lien (other than under this chapter) that is superior to the interest of the transferee.
(2) If applicable law permits a transfer to be perfected under subdivision (1) and the transfer is not so perfected before the commencement of an action for relief under this chapter, the transfer is considered made immediately before the commencement of the action.
(3) If applicable law does not permit a transfer to be perfected under subdivision (1), the transfer is made when it becomes effective between the debtor and the transferee.
(4) A transfer is not made until the debtor has acquired rights in the asset transferred.
(5) An obligation is incurred:
(A) if oral, when it becomes effective between the parties; or
(B) if evidenced by a record, when the record signed by the obligor is delivered to or for the benefit of the obligee.

32-18-2-17 Remedies of creditors

Sec. 17.

(a) In an action for relief against a transfer or an obligation under this chapter, a creditor, subject to the limitations in section 18 of this chapter, may obtain any of the following:
(1) Avoidance of the transfer or obligation to the extent necessary to satisfy the creditor’s claim.
(2) An attachment or other provisional remedy against the asset transferred or other property of the transferee in accordance with the procedure prescribed by IC 34-25-2-1 or any other applicable statute providing for attachment or other provisional remedy against debtors generally.
(3) Subject to applicable principles of equity and in accordance with applicable rules of civil procedure, any of the following:
(A) An injunction against further disposition by the debtor or a transferee, or both, of the asset transferred, its proceeds, or of other property.
(B) Appointment of a receiver to take charge of the asset transferred or of the property of the transferee.
(C) Any other relief the circumstances require.
(b) If a creditor has obtained a judgment on a claim against the debtor, the creditor, if the court orders, may levy execution on the asset transferred or its proceeds.

32-18-2-18 Defenses, liability, and protection of transferee

Sec. 18.

(a) A transfer or an obligation is not voidable under section 14(a)(1) of this chapter against a person that took in good faith and for a reasonably equivalent value given the debtor or against any subsequent transferee or obligee.
(b) To the extent that a transfer is avoidable in an action by a creditor under section 17(a)(1) of this chapter, the following rules apply:
(1) Except as otherwise provided in this chapter, the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection (c), or the amount necessary to satisfy the creditor’s claim, whichever is less. The judgment may be entered against:
(A) the first transferee of the asset or the person for whose benefit the transfer was made; or
(B) an immediate or mediate transferee of the first transferee, other than:
(i) a good faith transferee that took for value; or
(ii) an immediate or mediate good faith transferee of a person described in item (i).
(2) Recovery under section 17(a)(1) or 17(a)(2) of this chapter or from the asset transferred or its proceeds, by levy or otherwise, is available only against a person described in subdivision (1).
(c) If the judgment under subsection (b) is based upon the value of the asset transferred, the judgment must be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment as the equities may require.
(d) Notwithstanding voidability of a transfer or an obligation under this chapter, a good faith transferee or obligee is entitled, to the extent of the value given the debtor for the transfer or obligation, to:
(1) a lien on or a right to retain an interest in the asset transferred;
(2) enforcement of an obligation incurred; or
(3) a reduction in the amount of the liability on the judgment.
(e) A transfer is not voidable under section 14(a)(2) or section 15 of this chapter if the transfer results from:
(1) termination of a lease upon default by the debtor when the termination is permitted by the lease and applicable law; or
(2) enforcement of a security interest in compliance with Article 9 of the Uniform Commercial Code, other than acceptance of collateral in full or partial satisfaction of the obligation it secures.
(f) The following rules determine the burden of proving matters referred to in this section:
(1) A party that seeks to invoke subsection (a), (d), or (e) has the burden of proving the applicability of that subsection.
(2) Except as otherwise provided in subdivisions (3) and (4), the creditor has the burden of proving each applicable element of subsection (b) or (c).
(3) The transferee has the burden of proving the applicability to the transferee of subsection (b)(1)(B)(i) or (b)(1)(B)(ii).
(4) A party that seeks adjustment under subsection (c) has the burden of proving the adjustment.
(g) The standard of proof required to establish matters referred to in this section is by a preponderance of the evidence.

32-18-2-19 Extinguishment of cause of action

Sec. 19.

A claim for relief with respect to a transfer or obligation under this chapter is extinguished unless brought as follows:

(1) If brought under section 14(a)(1) of this chapter, an action is extinguished unless brought not later than the later of the following:
(A) Four (4) years after the transfer was made or the obligation was incurred.
(B) One (1) year after the transfer or obligation was or could reasonably have been discovered by the claimant.
(2) If brought under section 14(a)(2) or 15 of this chapter, an action is extinguished unless it is brought not later than four (4) years after the transfer was made or the obligation was incurred.

32-18-2-19.3 Determining a debtor’s location; governing law

Sec. 19.3.

(a) In this section, the following rules determine a debtor’s location:
(1) A debtor who is an individual is located at the individual’s principal residence.
(2) A debtor that is an organization and has only one (1) place of business is located at its place of business.
(3) A debtor that is an organization and has more than one (1) place of business is located at its chief executive office.
(b) A claim for relief in the nature of a claim for relief under this chapter is governed by the law of the jurisdiction in which the debtor is located when the transfer is made or the obligation is incurred.

32-18-2-19.5 Series organization and each protected series of the organization considered a separate person

Sec. 19.5.

(a) The following definitions apply throughout this section:
(1) “Protected series” means an arrangement, however denominated, created by a series organization that, under the law under which the series organization is organized, has the characteristics set forth in subdivision (2).
(2) “Series organization” means an organization that, under the law under which it is organized, has the following characteristics:
(A) The organic record of the organization provides for creation by the organization of one (1) or more protected series, however denominated, with respect to specified property of the organization, and for records to be maintained for each protected series that identify the property of or associated with the protected series.
(B) Debt incurred or existing with respect to the activities of, or property of or associated with, a particular protected series is enforceable against the property of or associated with the protected series only, and not against the property of or associated with the organization or other protected series of the organization.
(C) Debt incurred or existing with respect to the activities or property of the organization is enforceable against the property of the organization only, and not against the property of or associated with a protected series of the organization.
(b) A series organization and each protected series of the organization is a separate person for purposes of this chapter, even if for other purposes a protected series is not a person separate from the organization or other protected series of the organization.

32-18-2-20 Supplementary provisions

Sec. 20.

Unless superseded by this chapter, the principles of law and equity, including the law merchant and the law relating to principal and agent, equitable subordination, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake, insolvency, or other validating or invalidating cause, supplement this chapter.

32-18-2-21 Uniformity of application and construction

Sec. 21.

This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.

32-18-2-22 Relation to federal Electronic Signatures in Global and National Commerce Act

Sec. 22.

This chapter modifies, limits, or supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. 7001 et seq., but does not modify, limit, or supersede Section 101(c) of that act, 15 U.S.C. 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 U.S.C. 7003(b).

32-18-2-23 Provisions of Uniform Voidable Transactions Act adopted by act; citation; construction with NCCUSL comments

Sec. 23.

This chapter:

(1) adopts, in part, provisions of the Uniform Voidable Transactions Act as released by the National Conference of Commissioners on Uniform State Laws; and
(2) may be cited as the Indiana Uniform Voidable Transactions Act.

However, in interpreting solely this chapter, comments released by a committee of the National Conference of Commissioners on Uniform State Laws shall not be considered as authority.





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