Is this fraudulent transfer?

[stephan66]

What is the name of your state? Florida
Judgment debtor transferred around 9K of his money to his wife’s account few weeks ago. Under oath, he and his wife both testified that his wife gave him 9K in cash when they both visited their native country two months back (their passports prove that they both visited another country together and stayed there for a around a month). She also testified that the 9K was given to her, by her parents, as gift in that country, then she gave that 9K to her husband as loan in that country when he needed that money when both of them were in that country. He testified that he spent that 9K (which his wife gave him as loan) in that other country. Therefore, now, the husband gave that 9K back to her in the US. Therefore they are claiming that there is no fraudulent transfer http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0726/0726.html in that. Please advice if this is fraudulent transfer and about my options.

 

[adjusterjack]

Testified?
What do you mean by testified?
In court?
What did you do about that testimony when it was given?
Did you provide EVIDENCE of a fraudulent transfer right then and there?
What did the judge do about that testimony?
Did he accept it or reject it?

If the judge accepted their testimony and you couldn't refute it WITH EVIDENCE, and the judge DID NOT award you any of the remedies in 726.108, then it's not a fraudulent transfer no matter what you think the statute says, and that $9000 is forever out of your reach.

Unless, of course, you wish to appeal the judge's decision to a higher court. Having grounds for appeal requires that you show that the judge made an error in interpreting the facts or interpreting the law, not just because you don't like the outcome.

Frankly, I don't think a "fraudulent" transfer can exist between spouses. But that's just my 2 cents.

Oh, one more thing. Did you have a lawyer representing you during the "testimony"?

 

[zddoodah]

Was the testimony given in the context of a judgment debtor exam?

Regardless, assuming the facts stated are true, it is not a fraudulent transfer because it was not a transfer without consideration. It was a repayment of a debt.

 

[stephan66]

Thanks for the replies. The testimony was given as part of judgment debtor's exam. I have no attorney at present.
I have nothing to disprove their claim.

 

[Litigator22]

Thanks for the replies. The testimony was given as part of judgment debtor's exam. I have no attorney at present.
I have nothing to disprove their claim.

You don't necessarily need to disprove her/their claim of the transfer having been made in satisfaction of a loan. Not initially at least.

If the proper proceedings are brought to set aside the transfer, the respondent wife would have the initial burden of going forward with her defense that the money was deposited to her account in repayment of a legitimate loan. And unless she could corroborate her testimony with documentary evidence that could be difficult. Especially in view of the husband's claim of insolvency and that the supposed transactions were totally interspousal and most likely entirely verbal - if not deceitfully contrived.

I think you have a good shot at her. Just don't attempt it pro se.

P. S. I'd make a small wager that if hubby should declare bankruptcy and the trustee moves against her bank account, she 'd think twice about testifying as to all this malarkey in front of a federal bankruptcy judge!

Committing perjury in proceedings supplement to a state court judgment is one thing, doing it in a Federal Court is quite another!

Good luck.

 

[stephan66]

Many thanks. The debtor is the only person in his home who has job (he works as an employee for a big company). His wife makes around 3K per year by doing some odd jobs. They have no children. His salary is directly deposited into a tenants by entirety joint bank account with his wife. These facts are true for the last 5-6 years at least. He transferred that 9K from that tenants by entirety joint bank account to his wife’s personal bank account. Debtor stated that his salary is protected for up to 6 months due to his head of family status http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0222/Sections/0222.11.html. Further, because the salary is directly deposited into tenants by entirety account, he is claiming that he can transfer that money, at anytime he wishes, to his wife’s personal account (or to his own retirement account or to his friends’ account or for charity, etc.) without committing a fraudulent transfer. I am new to this arena of head of family and tenants by entirety. Please give me some advice.

 

[adjusterjack]

In Florida, the TBE account is virtually indestructible. Scroll down to the table of contents and click on #4.

Tenancy by the Entirety Property in Florida - Alper Law

And he's right about the "head of the family" wage exemption and the 6 months thing for wages deposited in his bank account. The statute makes that abundantly clear.

Looks like your judgment is uncollectible.

Just out of curiosity, how did he end up owing you money. And how much?

 

[zddoodah]

If the proper proceedings are brought to set aside the transfer, the respondent wife would have the initial burden of going forward with her defense that the money was deposited to her account in repayment of a legitimate loan. And unless she could corroborate her testimony with documentary evidence that could be difficult.

I disagree. If the OP files a lawsuit and alleges fraudulent transfer, he/she would have the initial burden of proving the elements of fraudulent transfer. At the moment, the only known evidence is testimony that conclusively negates a fraudulent transfer. Unless the OP can come up with something to controvert the known evidence, he/she will lose.

P. S. I'd make a small wager that if hubby should declare bankruptcy and the trustee moves against her bank account, she 'd think twice about testifying as to all this malarkey in front of a federal bankruptcy judge!

Committing perjury in proceedings supplement to a state court judgment is one thing, doing it in a Federal Court is quite another!

No, it really isn't. The text of the federal perjury statute is a bit more florid than the Florida perjury statute, but they're substantively identical, and federal judges don't have some magical ability to ferret out perjurious testimony that state court judges lack.

Looks like your judgment is uncollectible.

Concur.

 

[Litigator22]

I disagree. If the OP files a lawsuit and alleges fraudulent transfer, he/she would have the initial burden of proving the elements of fraudulent transfer. At the moment, the only known evidence is testimony that conclusively negates a fraudulent transfer. Unless the OP can come up with something to controvert the known evidence, he/she will lose.
No, it really isn't. The text of the federal perjury statute is a bit more florid than the Florida perjury statute, but they're substantively identical, and federal judges don't have some magical ability to ferret out perjurious testimony that state court judges lack.

With all due respect your opinion as to the burden of proof in this instance differs from Florida's unique Proceedings Supplementary *

Briefly, on motion and affidavit the OP as judgment creditor has the ability to secure from the court a Notice to Appear directing the judgement creditor's wife to respond by sworn affidavit in which she "must raise any fact or defense opposing application of the property described in the Notice to Appear to satisfy the judgment, including legal defenses, . . . " In other words, the process is likened to an order to show cause.

And though it speaks of the debtor transferring species of personal property the legislative intent to broaden the creditors means of satisfaction is again reflected in Subsection (3)(a) which provides as follows:

"When, within 1 year before the service of process on the judgment debtor in the original proceeding or action, the judgment debtor has had title to, or paid the purchase price of, any personal property to which the judgment debtor’s spouse, any relative, or any person on confidential terms with the judgment debtor claims title and right of possession, the judgment debtor has the burden of proof to establish that such transfer or gift was not made to delay, hinder, or defraud creditors." (All eEmphasis mine)

Then there is subsection (3)(b) (in part):

"When any gift, transfer, assignment or other conveyance of personal property has been made or contrived by the judgment debtor to delay, hinder, or defraud creditors, the court shall order the gift, transfer, assignment or other conveyance to be void and direct the sheriff to take the property to satisfy the execution. "

__________________

Of course, perjury is perjury whether committed in a state or of federal venue. It's sometimes said to be the "forgotten crime." But you can rest assured that it is far less overlooked in a bankruptcy setting than it is in a state court proceeding supplementary to judgment!

The truth is that I can't recall one incident in my rather small state where an indictment for perjury has been lodged. But I have been in attendance in a bankruptcy courtroom where the judge has ordered the appearance of the U. S. Marshall to escort a petitioner to a holding cell! In one instance, both the petitioning couple.
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[*] Florida Statutes Title VI CIVIL PRACTICE AND PROCEDURE - Chapter 56 - Section 56.29 For an overview of the statutes see:

The New Roadmap for Proceedings Supplementary in Florida | Carlton Fields

 

[stephan66]

Litigator22 said:

Briefly, on motion and affidavit the OP as judgment creditor has the ability to secure from the court a Notice to Appear directing the judgement creditor's wife to respond by sworn affidavit in which she "must raise any fact or defense opposing application of the property described in the Notice to Appear to satisfy the judgment, including legal defenses, . . . " In other words, the process is likened to an order to show cause.


The above is from 56.29(2). However, 56.29(2) is:


http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0000-0099/0056/Sections/0056.29.html starts with “The judgment creditor shall, in the motion described in subsection (1) or in a supplemental affidavit, describe any property of the judgment debtor not exempt from execution [and which is] in the hands of any person or any property, debt, or other obligation due to the judgment debtor which may be applied toward the satisfaction of the judgment.”



However 222.11 head of family status http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0222/Sections/0222.11.html of the debtor (the court has not yet determined if the debtor is head of family, but once I try to collect the salary of the debtor, the debtor will, I hope, claims his head of family status and then the court determines if he is head of family or not, and I think he easily passes that test) is providing exception to his salary for 6 months (but because the salary is getting deposited directly into a tenants by entirety account of the debtor and his wife, it appears that the salary is always exempted from my collection).


May be I am wrong. Could you provide any advice?[/QUOTE][/QUOTE][/QUOTE][/QUOTE]

 

[adjusterjack]

You're right. You would have to file for the wage garnishment. Then he gets to claim head of the family exemption.

That his wife only makes $3000 per year would make the exemption virtually guaranteed.

 

[Litigator22]

Litigator22 said:

Briefly, on motion and affidavit the OP as judgment creditor has the ability to secure from the court a Notice to Appear directing the judgement creditor's wife to respond by sworn affidavit in which she "must raise any fact or defense opposing application of the property described in the Notice to Appear to satisfy the judgment, including legal defenses, . . . " In other words, the process is likened to an order to show cause.


The above is from 56.29(2). However, 56.29(2) is:


http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0000-0099/0056/Sections/0056.29.html starts with “The judgment creditor shall, in the motion described in subsection (1) or in a supplemental affidavit, describe any property of the judgment debtor not exempt from execution [and which is] in the hands of any person or any property, debt, or other obligation due to the judgment debtor which may be applied toward the satisfaction of the judgment.”



However 222.11 head of family status http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0222/Sections/0222.11.html of the debtor (the court has not yet determined if the debtor is head of family, but once I try to collect the salary of the debtor, the debtor will, I hope, claims his head of family status and then the court determines if he is head of family or not, and I think he easily passes that test) is providing exception to his salary for 6 months (but because the salary is getting deposited directly into a tenants by entirety account of the debtor and his wife, it appears that the salary is always exempted from my collection).


May be I am wrong. Could you provide any advice?

Yes, you are mistaken. Your error lies in thinking in terms of a wage garnishment. By sheer definition a wage earner's exemption afforded under F. S. 222.1 isn't applicable here.

 

[stephan66]

Adjusterjack said I am right, but Litigator22 said I am mistaken.
Litigator22: why wage earner's exemption under F. S. 222.1 isn't applicable here in 56.29? Could you give some details?

 

[adjusterjack]

56.29 is a procedure that leads to a debtor's examination, which you have apparently already done.

That, in turn, leads to a court order attaching or levying the applicable property.

If one of those orders are for wage garnishment, the debtor can move to cancel the wage garnishment on the grounds of the "head of family" exemption.

If your debtor can show that he contributes the required amount in support of his wife, he will succeed in getting the wage garnishment cancelled.

 

[Litigator22]

Adjusterjack said I am right, but Litigator22 said I am mistaken.
Litigator22: why wage earner's exemption under F. S. 222.1 isn't applicable here in 56.29? Could you give some details?

I don't know why the need to discuss a wage earner's exemption. Nothing you've reported that I recall suggests that the debtor is claiming it. But for whatever and for numerous obvious reasons - given the circumstances you've related - FS 222.1 SIMPLY DOES NOT FIT!

Clearly, by definition in order for any person to successfully claim a "head of family wage earner's exemption" there needs to be monies due and owing that person. Agreed so far?

So, given the fact that each of these blackguards have testified under oath that hubby's remittance to wifey of the $9K was in satisfaction of a pre-existing loan in that same amount . . . (also dismissive of any thoughts that the $9K represented earned wages to be held in trust by the wife)

It must then follow that neither can now be heard to argue that a like amount is due and owing from his wife and as such not subject to the exemption. No monies due and owing, no exemption. . . . okay?
_______________________

Also, PLEASE don't be misled to believe that any post-judgment efforts of yours - past or future - will constitute a waiver or somehow exhaust your rights to continually assert those remedies. No one is counting - (as someone has erroneously proposed).

As long as your judgment remains active and unsatisfied (and the debtor doesn't attempt to rinse the obligation in bankruptcy) you are at liberty to accordingly hound this deadbeat 'til the cows come home.