Fraudulent Conveyance

Once a conveyance is declared void because of fraud, the court can do full justice by ordering a sale of property under its direction. Every kind of property that can be used for the payment of debts can be reclaimed by creditors in a proper case. By statute many states exempt personal items—such as clothing, kitchen appliances, and household furniture—from being reached by creditors to satisfy debts.

The proceeds are used to pay off the costs of the lawsuit and to provide restitution to the creditors who brought the claims before the court. A debtor who has fraudulently transferred property to cheat his or her creditors might also be subject to statutory penalties and criminal prosecution, depending upon the law in the debtor's home state.