The Indiana Uniform Fraudulent Transfer Act (“IUFTA”) provides a useful tool for plaintiffs seeking collection of a claim or judgment. The IUFTA, Indiana Code § 32-18-2-1 et seq., governs the question of whether a transfer of assets by a debtor to another individual or entity is fraudulent.

Implications of the Indiana Uniform Fraudulent Transfer Act

Assessing the legitimacy of transfers of assets is of primary importance for anyone seeking to recover a debt under these conditions. An Indiana collections law firm can assist you in proving the fraudulent transfer of assets in Indiana, so you can collect the debt you are due.

Indiana Uniform Fraudulent Transfer Act Provisions

Indiana’s fraudulent transfer law states the following:

A transfer made or an obligation incurred by a debtor is fraudulent 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 under the following conditions:

• With actual intent to hinder, delay, or defraud any creditor of the debtor; or
• Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:
  • 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
  • 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.

Interpretation of Indiana Fraudulent Transfer Law: Badges of Fraud

When analyzing whether a fraudulent transfer of assets in Indiana occurred, courts can infer fraudulent intent from the circumstances, as the Indiana Court of Appeals did in Hoesman v. Sheffler, by examining several factors known as the “badges of fraud.” 

In Indiana, the determination of fraudulent intent using the badges of fraud analysis is at the discretion of the court. There is not a standard requirement as to the number of badges that must demonstrated. However, the following badges of fraud, as defined in Hoesman v. Sheffler, can be considered:

1. Whether a debtor transferred assets while a lawsuit was pending;
2. Whether the transfer left the debtor insolvent;
3. Whether the debtor engaged in “a series of contemporaneous transactions” that essentially stripped him or her of all property;
4. Whether the transactions were made outside “the usual course of doing business;”
5. Whether the debtor retained a benefit from the property even after the transaction;
6. Whether the property transfer was made for little or no return; and
7. Whether the transfer was between family members. 

An experienced Indiana collections attorney is best suited to assess how the badges of fraud analysis might apply under any set of facts.

How the Indiana Uniform Fraudulent Transfer Act Aids Creditors

A debtor or potential defendant cannot transfer his or her property in an attempt to evade the rightful claims of a creditor. If the court determines a transfer to be fraudulent, the IUFTA provides the court with a great deal of discretion in order to protect the rights of the creditor.

Under Indiana law, the following potential remedies are available to creditors under the IUFTA:

1. Avoidance of the transfer to the extent necessary to satisfy its claim;
2. An attachment against the asset transferred or other property of the transferee;
3. An injunction against further disposition by the debtor, transferee, or both;
4. Appointment of a receiver to take charge of the asset transferred or property of the transferee; or
5. Any other relief required by the circumstances. 

These discretionary powers of the court allow it to order transferred property, or its proceeds, to be returned to the debtor so that a creditor may collect on its judgment.

An Indiana Collections Law Firm Can Help Interpret Indiana Fraudulent Transfer Law

Before determining that an insolvent debtor is uncollectible, plaintiffs should consider whether any transfers of property by the debtor could be considered fraudulent. The Indiana Uniform Fraudulent Transfer Act provides plaintiffs with an opportunity to “undo” fraudulent transfers in order to protect their right to execution of judgments. Indiana collections law firm Camden & Meridew, P.C. can assist you in identifying and proving fraudulent transfer so you can successfully recover debts owed to you. Contact Corey Meridew or any of our experienced Indiana collections attorneys today by phone at 317-770-0000 or complete our online contact form to see how we can help.

This website supplies general information about the law but it is provided for informational purposes only. This content does not create an attorney-client relationship and more importantly is not meant to constitute legal advice. You should not act on any of the information contained herein without first consulting an attorney.