Definition - What does Fraudulent Transfer mean?
A fraudulent transfer is when a debtor attempts to put certain property out of reach of his or her creditor by transferring it to another, while still keeping control of the property. People who commit fraudulent transfers are attempting to prevent their creditors from seizing the property. For example, a person may give an automobile to a relative with the understanding that the person still owns it, to prevent it from being seized by a creditor.
Justipedia explains Fraudulent Transfer
Fraudulent transfers, also known as fraudulent conveyances, are a strategy that people use to try to trick their creditors. The goal of a fraudulent transfer is to make it seem like the debtor has less property or fewer valuable possessions than he or she actually owns. That way, the creditor cannot seize them. However, this is considered fraud and is illegal. Therefore, a person who attempts to do this can be charged with making a fraudulent transfer.