Wednesday, January 22, 2014

Statutory Exemptions Not Valid if Fraudulent Conveyance

Florida Statute Section 222.29 provides that there is no exemption for fraudulent transfers as follows "[a]n exemption from attachment, garnishment, or legal process provided by this chapter is not effective if it results from a fraudulent transfer or conveyance as provided in chapter 726."

Section 222.30(2) provides that "[a]ny conversion by a debtor of an asset that results in the proceeds of the asset becoming exempt by law from the claims of a creditor of the debtor is a fraudulent asset conversion as to the creditor, whether the creditor's claim to the asset arose before or after the conversion of the asset, if the debtor made the conversion with the intent to hinder, delay, or defraud the creditor."

The definitions from 726 are to be used unless unreasonable and transfers are deemed fraudulent if a person doesn't receive a reasonable equivalent value.

These provisions are illustrated in the case of In re Charles Lowery, Case 00-6131-3F7, Middle District of Florida.