What is the name of your state? Florida
My husband lost a case in 2019 and should pay about $50,000 to the creditor. However, after trying for a year, the creditor stopped pursuing the collection efforts. I am not a party in that case. In 2020, my husband urgently needed money and I loaned him $30,000 from my personal account, and I gave that as interest free loan (payable within the next 2 years). I wrote a check from my bank account and he deposited in his personal account and used that, and we have bank documents and agreement for this loan. Now, if my husband pays me back that $30,000, then will it create any issue to me or to my husband, form the creditor, specifically in terms of fraudulent transfer act of Florida?
(1). The relevant law on fraudulent transfers: http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0726/0726.html 726.201 Fraudulent loans void.— “When any loan of goods and chattels shall be pretended to have been made to any person with whom or those claiming under her or him, possession shall have remained for the space of 2 years without demand and pursued by due process of law on the part of the pretended lender, or where any reservation or limitation shall be pretended to have been made of a use or property by way of condition, reversion, remainder or otherwise in goods and chattels, and the possession thereof shall have remained in another as aforesaid, the same shall be taken, as to the creditors and purchasers of the persons aforesaid so remaining in possession, to be fraudulent within this chapter, and the absolute property shall be with the possession, unless such loan, reservation or limitation of use or property were declared by will or deed in writing proved and recorded.”[emphasis added]
(2). The relevant law on paying back among different creditors:
(a). Jacksonville Bulls v. Blatt, 535 So. 2d, 626 (Fla. 3rd Dist. Ct. App. 1988), https://www.courtlistener.com/opinion/1777167/jacksonville-bulls-football-ltd-v-blatt/? :
“if a judgment debtor disposes of assets for adequate cash, the transaction will not be considered fraudulent in the absence of a showing that the debtor intended to give the funds received to other than existing creditors. Otherwise stated, it is not fraudulent to give the funds to some but not all existing creditors, even though the effect might be to injure or prejudice an existing creditor who was not chosen to receive the debtor's largesse. These so-called preferential transfers are not deemed fraudulent even though their natural effect is to hinder or delay the non-preferred creditors. Jackson v. Citizens' Bank & Trust Co., 53 Fla. 265, 44 So. 516; Godard v. Crenshaw, 136 Fla. 78, 186 So. 822; Jones v. Wear, 111 Fla. 69, 149 So. 345 (1933); Vickers v. Glenn, 102 Fla. 535, 136 So. 326 (1931); Baldwin v. La Fayette Land Co., 62 Fla. 129, 56 So. 943 (1912). A creditor may properly accept a preference even if the creditor knows that the debtor is making a "calculatedly preferential transfer" for the purpose of disfavoring other creditors. Baldwin v. La Fayette Land Co., 62 Fla. 129, 56 So. 943; Miles v. Katz, 405 So. 2d 750 (Fla. 4th DCA 1981); Mission Bay Campland, Inc. v. Sumner Financial Corp., 731 F.2d 768 (11th Cir.1984).”
(b). Miles v. Katz, 405 So. 2d 750, 751 (Fla. 4th Dist.Ct. App.1981):
“A debtor's preferential transfer of property to a creditor cannot be declared fraudulent as to other creditors, although the debtor in making it, intended to defeat their claims, and the preferred creditor had knowledge of such intention if the preferred creditor did not actually participate in the debtor's fraudulent purpose. See, Vickers v. Glenn, 102 Fla. 535, 136 So. 326 (1931). If the only purpose of the creditor is to secure his debt, and the property is not worth materially more than the debt, the transaction is not fraudulent. Nelson v. Cravero Constructors, Inc., 117 So. 2d 764 (Fla. 3rd DCA 1960). And this is so, although the preferred creditor knows that the debtor is insolvent, that the transfer is of all of the debtor's property, that there are other creditors, that the debtor is actuated solely by the desire to defraud his own creditors, and the effect of the debtor's action will be to defeat them. The preferred creditor, however, must act in good faith, but if he takes the conveyance for the purpose of aiding in the fraud, it is void. See, Nelson, supra.”
My husband lost a case in 2019 and should pay about $50,000 to the creditor. However, after trying for a year, the creditor stopped pursuing the collection efforts. I am not a party in that case. In 2020, my husband urgently needed money and I loaned him $30,000 from my personal account, and I gave that as interest free loan (payable within the next 2 years). I wrote a check from my bank account and he deposited in his personal account and used that, and we have bank documents and agreement for this loan. Now, if my husband pays me back that $30,000, then will it create any issue to me or to my husband, form the creditor, specifically in terms of fraudulent transfer act of Florida?
(1). The relevant law on fraudulent transfers: http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0726/0726.html 726.201 Fraudulent loans void.— “When any loan of goods and chattels shall be pretended to have been made to any person with whom or those claiming under her or him, possession shall have remained for the space of 2 years without demand and pursued by due process of law on the part of the pretended lender, or where any reservation or limitation shall be pretended to have been made of a use or property by way of condition, reversion, remainder or otherwise in goods and chattels, and the possession thereof shall have remained in another as aforesaid, the same shall be taken, as to the creditors and purchasers of the persons aforesaid so remaining in possession, to be fraudulent within this chapter, and the absolute property shall be with the possession, unless such loan, reservation or limitation of use or property were declared by will or deed in writing proved and recorded.”[emphasis added]
(2). The relevant law on paying back among different creditors:
(a). Jacksonville Bulls v. Blatt, 535 So. 2d, 626 (Fla. 3rd Dist. Ct. App. 1988), https://www.courtlistener.com/opinion/1777167/jacksonville-bulls-football-ltd-v-blatt/? :
“if a judgment debtor disposes of assets for adequate cash, the transaction will not be considered fraudulent in the absence of a showing that the debtor intended to give the funds received to other than existing creditors. Otherwise stated, it is not fraudulent to give the funds to some but not all existing creditors, even though the effect might be to injure or prejudice an existing creditor who was not chosen to receive the debtor's largesse. These so-called preferential transfers are not deemed fraudulent even though their natural effect is to hinder or delay the non-preferred creditors. Jackson v. Citizens' Bank & Trust Co., 53 Fla. 265, 44 So. 516; Godard v. Crenshaw, 136 Fla. 78, 186 So. 822; Jones v. Wear, 111 Fla. 69, 149 So. 345 (1933); Vickers v. Glenn, 102 Fla. 535, 136 So. 326 (1931); Baldwin v. La Fayette Land Co., 62 Fla. 129, 56 So. 943 (1912). A creditor may properly accept a preference even if the creditor knows that the debtor is making a "calculatedly preferential transfer" for the purpose of disfavoring other creditors. Baldwin v. La Fayette Land Co., 62 Fla. 129, 56 So. 943; Miles v. Katz, 405 So. 2d 750 (Fla. 4th DCA 1981); Mission Bay Campland, Inc. v. Sumner Financial Corp., 731 F.2d 768 (11th Cir.1984).”
(b). Miles v. Katz, 405 So. 2d 750, 751 (Fla. 4th Dist.Ct. App.1981):
“A debtor's preferential transfer of property to a creditor cannot be declared fraudulent as to other creditors, although the debtor in making it, intended to defeat their claims, and the preferred creditor had knowledge of such intention if the preferred creditor did not actually participate in the debtor's fraudulent purpose. See, Vickers v. Glenn, 102 Fla. 535, 136 So. 326 (1931). If the only purpose of the creditor is to secure his debt, and the property is not worth materially more than the debt, the transaction is not fraudulent. Nelson v. Cravero Constructors, Inc., 117 So. 2d 764 (Fla. 3rd DCA 1960). And this is so, although the preferred creditor knows that the debtor is insolvent, that the transfer is of all of the debtor's property, that there are other creditors, that the debtor is actuated solely by the desire to defraud his own creditors, and the effect of the debtor's action will be to defeat them. The preferred creditor, however, must act in good faith, but if he takes the conveyance for the purpose of aiding in the fraud, it is void. See, Nelson, supra.”
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