Defined ~ Asset And Property
Asset Property Definition Mainuvta0102definitionasset
''ASSET" AND "PROPERTY" DEFINED
§1(2) “Asset” means property of a debtor, but the term does not include:
(i) property to the extent it is encumbered by a valid lien;
(ii) property to the extent it is generally exempt under nonbankruptcy law; or
(iii) 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 tenant.
Reporter's Comment to § 1(2) ¶ 1.
The definition of “asset” is substantially to the same effect as the definition of “assets” in § 1 of the Uniform Fraudulent Conveyance Act.
The definition in this Act, unlike that in the earlier Act, does not, however, require a determination that the property is liable for the debts of the debtor.
Thus, for example, an unliquidated claim for damages resulting from personal injury or a contingent claim of a surety for reimbursement, subrogation, restitution, contribution, or the like may be counted as an asset for the purpose of determining whether the holder of the claim is solvent as a debtor under § 2 of this Act, even if applicable law does not allow such an asset to be levied on and sold by a creditor. Cf. Manufacturers & Traders Trust Co. v. Goldman (In re Ollag Construction Equipment Corp.), 578 F.2d 904, 907-09 (2d Cir. 1978).
Reporter's Comment to § 1(2) ¶ 2.
Subparagraphs (i), (ii), and (iii) provide clarification by excluding from the term not only generally exempt property but also an interest in a tenancy by the entirety in many states and an interest that is generally beyond reach by unsecured creditors because subject to a valid lien.
This Act, like the Uniform Fraudulent Conveyance Act and the Statute of 13 Elizabeth, declares rights and provides remedies for unsecured creditors against transfers that impede them in the collection of their claims.
The laws protecting valid liens against impairment by levying creditors, exemption statutes, and the rules restricting levyability of interest in entireties property are limitations on the rights and remedies of unsecured creditors, and it is therefore appropriate to exclude property interests that are beyond the reach of unsecured creditors from the definition of “asset” for the purposes of this Act.
Reporter's Comment to § 1(2) ¶ 3.
A creditor of a joint tenant or tenant in common may ordinarily collect a judgment by process against the tenant’s interest, and in some states a creditor of a tenant by the entirety may likewise collect a judgment by process against the tenant’s interest. See 2 American Law of Property 10, 22, 28-32 (1952); Craig, An Analysis of Estates by the Entirety in Bankruptcy, 48 Am.Bankr.L.J. 255, 258-59 (1974).
The levyable interest of such a tenant is included as an asset under this Act.
Reporter's Comment to § 1(2) ¶ 4.
The definition of “assets” in the Uniform Fraudulent Conveyance Act excluded property that is exempt from liability for debts.
The definition did not, however, exclude all property that cannot be reached by a creditor through judicial proceedings to collect a debt.
Thus, it included the interest of a tenant by the entirety although in nearly half the states such an interest cannot be subjected to liability for a debt unless it is an obligation owed jointly by the debtor with his or her cotenant by the entirety. See 2 American Law of Property 29 (1952); Craig, An Analysis of Estates by the Entirety in Bankruptcy, 48 Am.Bankr.L.J. 255, 258 (1974).
The definition in this Act requires exclusion of interests in property held by tenants by the entirety that are not subject to collection process by a creditor without a right to proceed against both tenants by the entirety as joint debtors.
Reporter's Comment to § 1(2) ¶ 5.
The reference to “generally exempt” property in § 1(2)(ii) recognizes that all exemptions are subject to exceptions. Creditors having special rights against generally exempt property typically include claimants for alimony, taxes, wages, the purchase price of the property, and labor or materials that improve the property.
See Uniform Exemptions Act § 10 (1979) and the accompanying Comment.
The fact that a particular creditor may reach generally exempt property by resorting to judicial process does not warrant its inclusion as an asset in determining whether the debtor is insolvent.
Reporter's Comment to § 1(2) ¶ 6.
Because this Act is not an exclusive law on the subject of voidable transfers and obligations (see Comment 9 to § 4), it does not preclude the holder of a claim that may be collected by process against property generally exempt as to other creditors from obtaining relief from a transfer of such property that hinders, delays, or defrauds the holder of such a claim.
Likewise the holder of an unsecured claim enforceable against tenants by the entirety is not precluded by the Act from pursuing a remedy against a transfer of property held by the entirety that hinders, delays, or defrauds the holder of such a claim.
Reporter's Comment to § 1(2) ¶ 7.
Nonbankruptcy law is the law of a state or federal law that is not part of the Bankruptcy Code, Title 11 of the United States Code.
The definition of an “asset” thus does not include property that would be subject to administration for the benefit of creditors under the Bankruptcy Code unless it is subject under other applicable law, state or federal, to process for the collection of a creditor’s claim against a single debtor.
The definition of an "asset" is very expansive and encompasses literally any asset that could be defined as "property", under Section 1(12), with three exceptions:
(1) Property subject to a bona fide security interest;
(2) Exempt property; and
(3) TBE property, so long as both parties are not debtors.
§1(12) “Property” means anything that may be the subject of ownership.
Reporter's Comment to § 1(12).
The definition of “property” is derived from Uniform Probate Code § 1 201(33) (1969).
Property includes both real and personal property, whether tangible or intangible, and any interest in property, whether legal or equitable.
The definition of "property" is very expansive. Essentially, if it can be titled in the debtor, it is "property".
ARTICLES ON ASSET
- 2021.10.21 ... Residence Underwater Due To Liens Not An Asset That Could Be Fraudulently Transferred In Tootian
- 2020.06.11 ... Bank That Was Financially Involved With Debtor Gets Caught Up In Fraudulent Transfer Case In Wilson
- 2019.10.19 ... Texas Homestead Gets Constitutional Protection From Fraudulent Transfer Claim In Lapides
- 2018.04.22 ... State And Federal Fraudulent Transfer Law Diverge Over Exempt Property In Vorhes
- 2017.01.18 ... Fraudulent Transfer Law Trumps Tenancy By The Entireties In Knoll
- 2016.07.30 … Fraudulent Transfer Defeats Tenancy By The Entireties Protection Of Sarasota Home In Major
- 2015.11.27 ... Silver Bars and Fraudulent Transfers in Rego Group
!!!COURT OPINIONS: DEFINITION OF ASSET AND PROPERTY
Asset Subject To Bona Fide Liens
In re Tootian (Goldman v. Dardashti), 2021 WL 4558290 (C.D.Cal., Oct. 5, 2021).
Shah v. Blaloch, 2017 WL 4543694 (Az.App., 2017)
Tenancy by the Entireties (TBE)
Knoll v. Uku, 2017 WL 117655 (Pa., 2017).
U.S. v. Major, 551 B.R. 531 (M.D.Fla., 2016).