Michigan Laws 566.34 – Transfer with intent to defraud
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Terms Used In Michigan Laws 566.34
- Asset: means property of a debtor. See Michigan Laws 566.31
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- claim for relief: means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured. See Michigan Laws 566.31
- Creditor: means a person that has a claim. See Michigan Laws 566.31
- Debt: means liability on a claim. See Michigan Laws 566.31
- Debtor: means a person that is liable on a claim. See Michigan Laws 566.31
- Disposition: means that term as defined in section 2 of the qualified dispositions in trust act, 2016 PA 330, MCL 700. See Michigan Laws 566.31
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Insider: includes all of the following:
(i) If the debtor is an individual, all of the following:
(A) A relative of the debtor or of a general partner of the debtor. See Michigan Laws 566.31Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period. Property: means anything that may be the subject of ownership. See Michigan Laws 566.31 Qualified disposition: means that term as defined in section 2 of the qualified dispositions in trust act, 2016 PA 330, MCL 700. See Michigan Laws 566.31 Transfer: means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset. See Michigan Laws 566.31
(1) Except as otherwise provided in subsection (4), a transfer made or obligation incurred by a debtor is voidable 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 in either of the following circumstances:
(a) With actual intent to hinder, delay, or defraud any creditor of the debtor.
(b) Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor did either of the following:
(i) 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.
(ii) Intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor’s ability to pay as they became due.
(2) In determining actual intent under subsection (1)(a) or (4), consideration may be given, among other factors, to whether 1 or more of the following occurred:
(a) The transfer or obligation was to an insider.
(b) The debtor retained possession or control of the property transferred after the transfer.
(c) The transfer or obligation was disclosed or concealed.
(d) Before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit.
(e) The transfer was of substantially all of the debtor’s assets.
(f) The debtor absconded.
(g) The debtor removed or concealed assets.
(h) The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred.
(i) The debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred.
(j) The transfer occurred shortly before or shortly after a substantial debt was incurred.
(k) The debtor transferred the essential assets of the business to a lienor that transferred the assets to an insider of the debtor.
(3) Except as otherwise provided in subsection (4), a creditor that makes a claim for relief under subsection (1) has the burden of proving the elements of the claim for relief by a preponderance of the evidence.
(4) A qualified disposition is fraudulent as to the creditor whose claim arose after the qualified disposition only if the qualified disposition was made with actual intent to hinder, delay, or defraud any creditor of the debtor. With respect to a qualified disposition, a creditor has the burden of proving the elements of the claim for relief by clear and convincing evidence.