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VOIDABLE TRANSACTIONS & FRAUDULENT TRANSFERS
VIRGINIA FRAUDULENT CONVEYANCES CODE
Virginia Fraudulent Conveyances Code
(Non-Uniform Act)
Va.Code §§ 55.1-400, et seq.
{ Check Currency - Current Only As Of January 1, 2020 }
§ 55.1-400 - Void fraudulent acts; bona fide purchasers not affected
§ 55.1-401 - Voluntary gifts, conveyances, assignments, transfers, or charges; void as to prior creditors
§ 55.1-402 - Creditor's action to avoid such gifts, conveyances, assignments, transfers, or charges
§ 55.1-403 - Creditor's action; attorney fees
§ 55.1-404 - Authority of court to set aside
§ 55.1-412 - Words "creditors" and "purchasers," how construed
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§ 55.1-400 - Void fraudulent acts; bona fide purchasers not affected
Every (i) gift, conveyance, assignment, or transfer of, or charge upon, any estate, real or personal, (ii) action commenced or order, judgment, or execution suffered or obtained, and (iii) bond or other writing given with intent to delay, hinder, or defraud creditors, purchasers, or other persons of or from what they are or may be lawfully entitled to shall, as to such creditors, purchasers, or other persons or their representatives or assigns, be void. This section shall not affect the title of a purchaser for valuable consideration, unless it appears that he had notice of the fraudulent intent of his immediate grantor or of the fraud rendering void the title of such grantor.
§ 55.1-401 - Voluntary gifts, conveyances, assignments, transfers, or charges; void as to prior creditors
Every gift, conveyance, assignment, transfer, or charge that is not upon consideration deemed valuable in law, or that is upon consideration of marriage by an insolvent transferor or by a transferor who is thereby rendered insolvent, shall be void as to creditors whose debts were contracted at the time such gift, conveyance, assignment, transfer, or charge was made but shall not, on that account merely, be void as to creditors whose debts have been contracted, or as to purchasers who have purchased, after such gift, conveyance, assignment, transfer, or charge was made. Even though it is decreed to be void as to a prior creditor, because voluntary or upon consideration of marriage, it shall not, for that cause, be decreed to be void as to subsequent creditors or purchasers.
§ 55.1-402 - Creditor's action to avoid such gifts, conveyances, assignments, transfers, or charges
Before obtaining a judgment for his claim, a creditor may, whether such claim is due and payable or not, institute any action that he may institute after obtaining such judgment to avoid a gift, conveyance, assignment, or transfer of, or charge upon, the estate of his debtor declared void by either § 55.1-400 or 55.1-401. Such creditor may, in such action, have all the relief with respect to such estate to which he would be entitled after obtaining a judgment for the claim for which he may be entitled to recover. A creditor availing himself of this section shall have a lien from the time of bringing his action on all the estate, real and personal, and a petitioning creditor shall also be entitled to a lien from the time of filing his petition in the court in which the action is brought. If the proceeds of sale are insufficient to satisfy the claims of all the creditors whose liens were acquired at the same time, they shall be applied proportionately to such claims, and the court may issue an order against the debtor for any deficiency remaining on the claim of any creditor after applying his share of the proceeds of sale, or, if any creditor is not entitled to share in such proceeds, may issue an order against the debtor for the full amount of the creditor's claim. This section is subject to the provisions of §§ 8.01-268 and 8.01-269.
§ 55.1-403 - Creditor's action; attorney fees
In any action brought by a creditor pursuant to § 55.1-400, 55.1-401, or 55.1-402, where a (i) gift; (ii) deed; (iii) conveyance, assignment, or transfer of or charge upon the estate of a debtor; (iv) action commenced or judgment or execution suffered or obtained; or (v) bond or other writing is declared void, the court shall award counsel for the creditor reasonable attorney fees against the debtor. Upon a finding of fraudulent conveyance pursuant to § 55.1-400, the court may assess sanctions, including such attorney fees, against all parties over which it has jurisdiction who, with the intent to defraud and having knowledge of the judgment, participated in the conveyance. Should there be a resulting judicial sale, any award of attorney fees shall be paid out of the proceeds of the sale, as other costs are paid, provided that the award of attorney fees does not affect a prior lien creditor not represented by the attorney.
§ 55.1-404 - Authority of court to set aside
The court may set aside a fraudulent conveyance or voluntary transfer pursuant to § 55.1-400 or 55.1-401 during an action brought by a creditor to execute on a judgment, either on motion of the creditor or on its own motion, provided that all parties who have an interest in the property subject to the conveyance or transfer are given notice of the proceeding. The court, by order, may direct the clerk to issue the proper process against such parties and, upon the maturing of the case, proceed to make such orders as would have been proper if the new parties had been made parties at the commencement of the action.
§ 55.1-412 - Words "creditors" and "purchasers," how construed
The words "creditors" and "purchasers," when used in any previous section of this chapter, shall not be restricted to the protection of creditors of and purchasers from the grantor, but shall also extend to and embrace all creditors and purchasers who, but for the deed or writing, would have had title to the property conveyed or a right to subject it to their debts.
RECENT ARTICLES
2020.06.30 ... Attorney Fees Held Awardable Under Nevada Fraudulent Transfer Law In Morgan Stanley Opinion
2020.06.11 ... Bank That Was Financially Involved With Debtor Gets Caught Up In Fraudulent Transfer Case In Wilson
2020.05.21 ... Utah Supreme Court Rejects Mixed Motive Test For Intentional Fraudulent Transfers In Jones Case
2020.01.06 ... Twyne’s Case And The Most Infamous Flock Of Sheep In Anglo-American Law
2019.12.07 ... New York Finally Modernizes Its Fraudulent Transfer Laws By Adopting The Uniform Voidable Transactions Act
2019.10.29 ... Repeal Of Kentucky’s Fraudulent Transfer Law In Favor Of UVTA Causes Headaches In Orchard
2019.10.19 ... Texas Homestead Gets Constitutional Protection From Fraudulent Transfer Claim In Lapides
Many more articles on voidable transactions law found here
UVTA - LOGICAL ORGANIZATION
(Designed For Litigators)
Click here to go to the Voidable Transactions Decision Chart
Overview of UVTA -- The process and result
Learn The Vocabulary Of The Act (Main Page)
Has A Voidable Transaction Occurred? (Main Page)
Does The Transferee Have A Defense? (Main Page)
What Remedies Are Available? (Main Page)
Other Helpful Provisions (Main Page)
UVTA - NUMERICAL ORGANIZATION
(Confusing & Difficult To Use)
The Uniform Law Commission's complete copy of the UVTA with comments in PDF format is available here. The webpage for the UVTA, showing states that have enacted and much other information regarding the Act is found here.
1 - Definitions
(1) Affiliate -- (2) Asset -- (3) Claim -- (4) Creditor -- (5) Debt -- (6) Debtor -- (7) Electronic -- (8) Insider -- (9) Lien -- (10) Organization -- (11) Person -- (12) Property -- (13) Record -- (14) Relative -- (15) Sign -- (16) Transfer -- (17) Valid Lien
2 - Insolvency - How insolvency is calculated
3 - Value - Issues relating to calculating value
4 - Transfer Or Obligation Voidable As To Present Or Future Creditor
(a)(1) {Intent Test} - To hinder, delay or defraud any creditor
(a)(2)(i) {Overextending Insolvency Test} - The debtor engages in a transaction for which it does not have the financial strength
(a)(2)(ii) {Sinking Insolvency Test} - The debtor is not technically insolvent but headed for insolvency
(b) {Badges of Fraud} - Circumstances available to prove the debtor's intent
5 - Transfer or Obligation Voidable As To Present Creditor
(a) {Insolvency Test} - The test preferred by creditors
(b) {Insider Preference Test} - Not really a fraudulent transfer test at all
6 - When Transfer Is Made Or Obligation Is Incurred - Determines the time of the transfer
7 - Remedies Of Creditor
{Non-Money Judgment Remedies} - Avoidance, attachment, etc.
8 - Defenses, Liability, And Protection Of Transferee Or Obligee
{Main Provisions} -The transferee's good faith for-value defense
(b) and (c) {Money Judgment Remedy} - Alternative remedy for creditors when avoidance is not good enough
9 - Extinguishment Of Claim For Relief - Similar to Statutes of Limitation
10 - Governing Law - Conflicts of Laws provisions
11 - Application To Series Organization - Applies to intra-series transfers
12 - Supplementary Provisions - Allows application of other law to issues unresolved by the UVTA
13 - Uniformity Of Application And Construction - Court opinions from other states may be looked to for guidance
14 - Relation To Electronic Signatures In Global And National Commerce - Waste of statutory space
15 - Short Title - From fraudulent transfers to voidable transactions
16 - Repeals; Conforming Amendment - Information for enacting legislatures
OTHER SOURCES OF
FRAUDULENT TRANSFER LAW
Fraudulent Transfers In Bankruptcy - Main Page
28 U.S.C. § 3301, et seq. - Where United States is the creditor
Common Law Fraudulent Transfer - Still exists in most states
Criminal Statutes -- Jurisdictions that criminalize fraudulent transfers
Fraudulent Conveyances Act of 1571 a/k/a Statute of 13 Elizabeth - The medieval statute to which the modern American UVTA traces some of its roots.
Statutes Of The U.S. Jurisdictions -- State and Territorial Voidable Transaction and Fraudulent Transfer Laws
TOPICAL COURT OPINIONS
DEFINITIONS
Creditor Definition - Court opinions on the definition of creditor
Debtor Insider Affiliate Relative Organization Person Definitions - Court opinions on the definitions of debtor, insider, etc.
Claim And Debt Definitions - Court opinions on the definitions of claim and debt
Asset And Property Definitions - Court opinions on the definitions of assets and property
Lien And Valid Lien Definitions - Court opinions on the definitions of lien and valid lien
Transfer Definition - Court opinions on the definition of transfer
Value And Reasonably Equivalent Value (REV) Definition - Court opinions on the definitions of value and reasonably equivalent value
Insolvency Definition - Court opinions on the definition of insolvency
TESTS
Insolvency Test - Court opinions relating to the Insolvency Test
Insider Preference Test - Court opinions relating to the Insider Preference Test
Overextending Insolvency Test - Court opinions relating to the Overextending Insolvency Test
Sinking Insolvency Test - Court opinions relating to the Sinking Insolvency Test
Intent Test - Court opinions relating to the Intent Test
Badges Of Fraud - Court opinions relating to the Badges of Fraud
DEFENSES
Extinguishment Periods a/k/a (incorrectly) Statute Of Limitations - Court opinions relating to the extinguishment periods
Transferee Good Faith - Court opinions relating to the transferee good faith for-value defense
REMEDIES
Non-Money Remedies - Court opinions relating to avoidance and other non-money remedies
Money Judgment Remedies - Court opinions relating to money judgments
Attorney Fees -- Court opinions relating to awards of attorney fees
Punitive Damages - Court opinions relating to punitive and exemplary damages
OTHER
Burdens of Proof - Court opinions relating to the burdens of proof
Conflict Of Laws - Court opinions relating to conflict of laws
Uniformity - Court opinions relating to uniformity with the laws of other jurisdictions
Supplementary Law - Court opinions relating to the interplay of the UVTA with other law
Jurisdictional Issues - Court opinions relating to jurisdiction of UVTA actions.
BANKRUPTCY
Section 548 - Court opinions relating to 11 USC 548
OTHER RESOURCES
OTHER INFORMATIONAL WEBSITES
by Jay Adkisson
Voidable Transactions:
Fraudulent Transfers In American Law
by Jay D. Adkisson (Available 2021)
Contact Jay Adkisson:
Phone: 702-953-9617 Fax: 877-698-0678 jay [at] jayad.com
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© 2021 Jay D. Adkisson. All rights reserved. No claim to government works or the works of the Uniform Law Commission. The information contained in this website is for general educational purposes only, does not constitute any legal advice or opinion, and should not be relied upon in relation to particular cases. Use this information at your own peril; it is no substitute for the legal advice or opinion of an attorney licensed to practice law in the appropriate jurisdiction. This site https://voidabletransactions.com Contact: jay [at] jayad.com or by phone to 702-953-9617 or by fax to 877-698-0678.