You have the right to attempt to claim property that you have a secured interest in if your debtor has stopped paying money on it. So if the property should end up sold or transferred to another party, a fraudulent transfer may have taken place.
Under state law, debtors cannot get rid of property in a sale or conveyance just to keep it out of the hands of a creditor.
Defining a fraudulent conveyance
A transfer of property can be illegal in the eyes of Ohio law if it meets certain criteria. A key element that characterizes a fraudulent conveyance includes an intent to defraud a creditor. This means the transfer occurred just to hinder, delay or deprive your rights to collect a debt.
Another characteristic of fraud is if the debtor failed to receive reasonably equivalent value in exchange for the transferred property. Additionally, the debtor may be insolvent either at the time of the conveyance or became such due to the transfer.
Remedies a creditor can pursue
Ohio law provides creditors with ways to stop or reverse an illegal property transfer. A creditor may seek to either avoid or undo the conveyance in order to reclaim the property. Another option is to attach or garnish the transferred property, effectively seizing it to satisfy the debt.
In the event you cannot recover the property, it is possible to obtain a monetary judgment against the debtor and the transferee for the value of the illegally transferred property. You can also seek a court order to prevent further disposition or transfer of the property until your dispute finds resolution.
These remedies might not come easily, as creditors have the burden of proof to establish the fraudulent nature of the transfer. Nonetheless, state law does not leave creditors without recourse if they feel another party illegally interfered with their right to collect on an unpaid debt.
