Money Damages Against Recipient of Fraudulent Transfer

Florida law limits creditor remedies for fraudulent transfers. A court may reverse a transfer but it may not impose additional damages against a debtor simply because the debtor transferred property to avoid the judgment. The law does not prohibit damages against a transferee who is not the debtor. The recipient of a fraudulent conveyance is exposed to damages. In a 2018 Florida case a judgment debtor arranged for the fraudulent conveyance of a residential property from his ex-spouse to an LLC owned and controlled by the debtor. The LLC then conveyed the property to the debtor who proceeded to occupy the property as his homestead. The court found that the creditor could not impose a lien or other remedy affecting the property once the property became the debtor’s homestead. The court stated that transfers in to a homestead may not be reversed even if the debtor established the homestead with specific intent to protect the property from forced sale. The court…

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