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How does a court treat a deed made to defraud creditors?

Bar Exam Prep Real Property Conveyances How does a court treat a deed made to defraud creditors?
😀 Real Property • Conveyances PROP#176

Legal Definition

Where a deed complies with formalities but was made with the purpose to defraud a creditor, the grantor's creditors may set it aside, unless the grantee was a bona fide purchaser.

Plain English Explanation

Court's don't like it when people try to avoid liability by hiding their assets. Thus, if you owe someone money so you decide to give away your property out of spite (or strategy) instead of risking that your creditor may be able to take your property, a court will ignore that conveyance and allow the creditor to still take the property from you.

Related Concepts

At closing, what is the implied covenant of marketable title? How does a court treat a voidable deed? How does a court treat a void deed? How does the Statute of Frauds apply to land sale contracts, and what is the effect of part performance? How may a defect in the Chain of Title impact an Implied Covenant of Marketable Title? How may an encumbrance impact an Implied Covenant of Marketable Title? How may zoning impact an Implied Covenant of Marketable Title? In assessing a conveyance of land, what are the types of notice? In assessing a Doctrine of Equitable Conversion issue, how does death affect passage of title? In assessing a Doctrine of Equitable Conversion issue, how does the Uniform Vendor and Purchaser Risk Act affect risk? In assessing a seller's liabilities for defective real property, what constitutes failure to disclose? In assessing a seller's liabilities for defective real property, when is a disclaimer sufficient to avoid liability? In assessing a seller's liabilities for defective real property, when is a seller liable for defects they do not mention? In assessing a seller's liabilities for defective real property, when is a seller liable for misrepresentation or fraud? In assessing a seller's liabilities for defective real property, when is there a warranty of fitness or quality? In assessing deed warranties, what is Against Encumbrances? In assessing deed warranties, what is Right to Convey? In assessing the formalities of a deed, what are the rules of construction and priority for the description of the land? In assessing the formalities of a deed, when is acceptance valid? In assessing the formalities of a deed, when is a description of land sufficient? In assessing the formalities of a deed, when is delivery valid? In assessing the warranties under a general warranty deed, what is Further Assurances? In assessing the warranties under a general warranty deed, what is Quiet Enjoyment? In assessing the warranties under a general warranty deed, what is Seisin? In assessing the warranties under a general warranty deed, what is Warranty? In land sale contracts, when is time of the essence? In land sale contracts, when must each party tender performance? Under a notice recording statute, when does a subsequent Bona Fide Purchaser prevail? Under a race-notice recording statute, when does a subsequent Bona Fide Purchaser prevail? Under a race recording statute, when does a subsequent Bona Fide Purchaser prevail? What are the 3 types of deeds and warranties? What are the requirements for a valid deed? What is a general warranty deed? What is a quitclaim deed? What is a special warranty deed? What is a wild deed? What is estoppel by deed? What is the Doctrine of Equitable Conversion? What is the Shelter Rule? What remedies are available to a buyer upon violation of an Implied Covenant of Marketable Title? What remedies are available to parties of a land sale contract if one of them breaches? When may a deed be an inter vivos gift? Who does title insurance protect? Who qualifies as a purchaser for value?
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