Constructive Transfers

A constructive conveyance does not require fraudulent intent, but rather it solely involves the underlying financial aspects of the deal. Specifically, if the debtor accepted less than the fair market value for an asset at a time when the debtor was in a distressed financial condition and as a result of the transfer, the transferor becomes insolvent or is left with unreasonably small capital to continue in business after the transfer. This may be considered a constructive transfer.

Unlike the deliberate fraudulent transfer, no intent to defraud is required to be found guilty of constructive fraudulent transfer.

 

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