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Fraudulent transfers

Section 548(a) of the Bankruptcy Code provides that the Trustee can avoid any transfer of an interest of the debtor in property that was made or incurred within 2 years before the date of the filing of the bankruptcy petition, if the debtor received less than a reasonably equivalent value in exchange for such transfer and was insolvent on the date of the transfer or became insolvent as a result of such transfer, and intended to incur, or believed that the debtor would incur, debts that would be beyond the debtor’s ability to pay as such matured. In addition, the Trustee can avoid transfers made within 4 years under Illinois law under similar circumstances. This means that the Trustee can bring an action to recover property fraudulently transferred by a Debtor to a third party.

The information contained herein is for educational and informational purposes and is not legal advice.