The NYDCL says fair consideration is given for property or obligation when a) in exchange for the property or obligation as a fair equivalent for it, and in good faith, property is conveyed or an antecedent debt is satisfied or b) the property or obligation is received in good faith to secure a present advance or antecedent debt in an amount not disproportionately small compared with the value of the property or obligation obtained. “Every conveyance made and every obligation incurred by a person who is or will be thereby rendered insolvent is fraudulent as to creditors without regard to his actual intent if the conveyance is made or the obligation is incurred without a fair consideration.” NYDCL § 273. Conveyances that are not for fair consideration are presumptively fraudulent-it is not necessary to prove an intent to defraud the creditor-when the conveyance is for less than fair consideration. Under the NYDCL, there is intentional fraud and also presumptive fraud. The NYDCL provides that a “fraudulent conveyance” by the debtor can be reached by the creditor, meaning the creditor can “disregard the conveyance and attach or levy execution upon the property conveyed.” NYDCL §278 (1)(a).Ī conveyance is defined as “includ every payment of money, assignment, release, transfer, lease, mortgage or pledge of tangible or intangible property, and also the creation of any lien or incumbrance.” NYDCL §270. Unfortunately, the principal has transferred his or her assets to a family member.īut you may still be able to collect the debt because of the New York State Debtor-Creditor Law (NYDCL). So you sue the buyer’s principal on the personal guarantee. Your buyer has no assets when you try to collect. The buyer fails to pay and has already sold your product to a third party. Has this happened to you? You sell a product to a company in New York State whose principal personally guarantees payment.
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