Legal Tip 2: Asset Protection

Discussion in 'Legal Issues' started by Terry_w, 20th Jun, 2015.

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  1. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

    9th Jun, 2006
    Australia wide
    When doing any transaction, especially related party transactions, consider the claw back provisions under the Bankruptcy Act, the 2 main ones being:

    120. Undervalued transactions see

    121. Transfers to defeat creditors

    Most people forget about the state legislation as well:
    e.g. Conveyancing Act 1919 (NSW)
    37A. Voluntary alienation to defraud creditors voidable

    Each State has its own legislation similar to the s37A

    What the above sections mean is that a transaction entered into with the intent of defeating creditors or putting property out of reach of the trustee in bankruptcy (if you were to go bankrupt) could be attacked. This can even apply to future creditors.

    So take care in how you do things, especially related party transfers such as changing title on property.

    I should post one legal tip per day - only on the areas of law that interest me.
    nucence likes this.