CHAPTER 2. UNIFORM FRAUDULENT TRANSFER ACT
IC 32-18-2
Chapter 2. Uniform Fraudulent Transfer Act
IC 32-18-2-1
Applicability of chapter
Sec. 1. (a) This chapter applies to all transfers made andobligations incurred after June 30, 1994.
(b) This chapter does not apply to a transfer made or an obligationincurred before July 1, 1994.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-2
"Asset" defined
Sec. 2. (a) As used in this chapter, "asset" means property of adebtor.
(b) The term does not include any of the following:
(1) Property, to the extent the property is encumbered by a validlien.
(2) Property, to the extent the property is generally exemptunder law other than federal bankruptcy law.
(3) An interest in property held in tenancy by the entireties tothe extent the interest is not subject to process by a creditorholding a claim against only one (1) tenant.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-3
"Claim" defined
Sec. 3. As used in this chapter, "claim" means a right to payment,whether the right is:
(1) reduced to judgment or not;
(2) liquidated or unliquidated;
(3) fixed or contingent;
(4) matured or unmatured;
(5) disputed or undisputed;
(6) legal or not;
(7) equitable or not; or
(8) secured or unsecured.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-4
"Creditor" defined
Sec. 4. As used in this chapter, "creditor" means a person who hasa claim.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-5
"Debt" defined
Sec. 5. As used in this chapter, "debt" means liability on a claim.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-6
"Debtor" defined
Sec. 6. As used in this chapter, "debtor" means a person who isliable on a claim.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-7
"Lien" defined
Sec. 7. (a) As used in this chapter, "lien" means a charge againstor an interest in property to secure payment of a debt or performanceof an obligation.
(b) The term includes any of the following:
(1) A security interest created by agreement.
(2) A judicial lien obtained by legal or equitable process orproceedings.
(3) A common law lien.
(4) A statutory lien.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-8
"Person" defined
Sec. 8. As used in this chapter, "person" means an individual, apartnership, a corporation, a limited liability company, anassociation, an organization, a government, a governmentalsubdivision or agency, a business trust, an estate, a trust, or any otherlegal or commercial entity.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-9
"Property" defined
Sec. 9. As used in this chapter, "property" means anything thatcan be the subject of ownership.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-10
"Transfer" defined
Sec. 10. (a) As used in this chapter, "transfer" means any mode ofdisposing of or parting with an asset or an interest in an asset,whether the mode is direct or indirect, absolute or conditional, orvoluntary or involuntary.
(b) The term includes payment of money, release, lease, andcreation of a lien or other encumbrance.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-11
"Valid lien" defined
Sec. 11. As used in this chapter, "valid lien" means a lien that iseffective against the holder of a judicial lien subsequently obtainedby legal or equitable process or proceedings.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-12
Insolvency
Sec. 12. (a) For purposes of this section, assets do not includeproperty that has been:
(1) transferred, concealed, or removed with intent to hinder,delay, or defraud creditors; or
(2) transferred in a manner making the transfer voidable underthis chapter.
(b) For purposes of this section, debts do not include an obligationto the extent it is secured by a valid lien on property of the debtor notincluded as an asset under this section.
(c) A debtor is insolvent if the sum of the debtor's debts is greaterthan all of the debtor's assets at a fair valuation.
(d) A debtor who is generally not paying the debtor's debts as theybecome due is presumed to be insolvent. This presumption imposesupon the party against whom the presumption is directed the burdenof proving that the nonexistence of insolvency is more probable thanits existence.
(e) A partnership is insolvent if the sum of the partnership's debtsis greater than the aggregate, at a fair valuation, of all of thepartnership's assets and the sum of the excess of the value of eachgeneral partner's nonpartnership assets over each general partner'snonpartnership debts.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-13
Value
Sec. 13. (a) Value is given for a transfer or an obligation if, inexchange for the transfer or obligation, property is transferred or anantecedent debt is secured or satisfied. Value does not include anunperformed promise made otherwise than in the ordinary course ofthe promisor's business to furnish support to the debtor or anotherperson.
(b) For purposes of sections 14(2) and 15 of this chapter, a persongives a reasonably equivalent value if the person acquires an interestof the debtor in an asset through a regularly conducted, noncollusiveforeclosure sale or execution of a power of sale for the acquisition ordisposition of the interest of the debtor upon default under amortgage, deed of trust, or security agreement.
(c) A transfer is made for present value if the exchange betweenthe debtor and the transferee is intended by the debtor and transfereeto be contemporaneous and is in fact substantially contemporaneous.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-14
Transfers fraudulent as to present and future creditors
Sec. 14. A transfer made or an obligation incurred by a debtor isfraudulent as to a creditor, whether the creditor's claim arose beforeor after the transfer was made or the obligation was incurred, if thedebtor made the transfer or incurred the obligation: (1) with actual intent to hinder, delay, or defraud any creditorof the debtor; or
(2) without receiving a reasonably equivalent value in exchangefor the transfer or obligation, and the debtor:
(A) was engaged or was about to engage in a business or atransaction for which the remaining assets of the debtor wereunreasonably small in relation to the business or transaction;or
(B) intended to incur or believed or reasonably should havebelieved that the debtor would incur debts beyond thedebtor's ability to pay as the debts became due.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-15
Transfers fraudulent as to present creditors
Sec. 15. A transfer made or an obligation incurred by a debtor isfraudulent as to a creditor whose claim arose before the transfer wasmade or the obligation was incurred if:
(1) the debtor made the transfer or incurred the obligationwithout receiving a reasonably equivalent value in exchange forthe transfer or obligation; and
(2) the debtor:
(A) was insolvent at that time; or
(B) became insolvent as a result of the transfer or obligation.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-16
When transfer is made or obligation incurred
Sec. 16. The following apply for purposes of this chapter:
(1) A transfer is made:
(A) with respect to an asset that is real property other than afixture (but including the interest of a seller or purchaserunder a contract for the sale of the asset), when the transferis so far perfected that a good faith purchaser of the assetfrom the debtor against whom applicable law permits thetransfer to be perfected cannot acquire an interest in theasset that is superior to the interest of the transferee; and
(B) with respect to an asset that is not real property or that isa fixture, when the transfer is so far perfected that a creditoron a simple contract cannot acquire a judicial lien (otherthan under this chapter) that is superior to the interest of thetransferee.
(2) If applicable law permits a transfer to be perfected undersubdivision (1) and the transfer is not so perfected before thecommencement of an action for relief under this chapter, thetransfer is considered made immediately before thecommencement of the action.
(3) If applicable law does not permit a transfer to be perfectedunder subdivision (1), the transfer is made when it becomeseffective between the debtor and the transferee. (4) A transfer is not made until the debtor has acquired rights inthe asset transferred.
(5) An obligation is incurred:
(A) if oral, when it becomes effective between the parties; or
(B) if evidenced by a writing, when the writing executed bythe obligor is delivered to or for the benefit of the obligee.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-17
Remedies of creditor
Sec. 17. (a) In an action for relief against a transfer or anobligation under this chapter, a creditor, subject to the limitations insection 18 of this chapter, may obtain any of the following:
(1) Avoidance of the transfer or obligation to the extentnecessary to satisfy the creditor's claim.
(2) An attachment or other provisional remedy against the assettransferred or other property of the transferee in accordancewith the procedure prescribed by IC 34-25-2-1 or any otherapplicable statute providing for attachment or other provisionalremedy against debtors generally.
(3) Subject to applicable principles of equity and in accordancewith applicable rules of civil procedure, any of the following:
(A) An injunction against further disposition by the debtoror a transferee, or both, of the asset transferred, its proceeds,or of other property.
(B) Appointment of a receiver to take charge of the assettransferred or of the property of the transferee.
(C) Any other relief the circumstances require.
(b) If a creditor has obtained a judgment on a claim against thedebtor, the creditor, if the court orders, may levy execution on theasset transferred or its proceeds.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-18
Transferee's defenses, liability, and protections
Sec. 18. (a) A transfer or an obligation is not voidable undersection 14(1) of this chapter against a person who took in good faithand for a reasonably equivalent value or against any subsequenttransferee or obligee.
(b) Except as otherwise provided in this chapter, to the extent atransfer is voidable in an action by a creditor under section 17(a)(1)of this chapter, the creditor may recover judgment for the value ofthe asset transferred, as adjusted under subsection (c), or the amountnecessary to satisfy the creditor's claim, whichever is less. Thejudgment may be entered against:
(1) the first transferee of the asset or the person for whosebenefit the transfer was made; or
(2) any subsequent transferee other than a good faith transfereewho took for value or from any subsequent transferee.
(c) If the judgment under subsection (b) is based upon the value
of the asset transferred, the judgment must be for an amount equal tothe value of the asset at the time of the transfer, subject to adjustmentas the equities may require.
(d) Notwithstanding voidability of a transfer or an obligationunder this chapter, a good faith transferee or obligee is entitled, tothe extent of the value given the debtor for the transfer or obligation,to:
(1) a lien on or a right to retain any interest in the assettransferred;
(2) enforcement of any obligation incurred; or
(3) a reduction in the amount of the liability on the judgment.
(e) A transfer is not voidable under section 14(2) or section 15 ofthis chapter if the transfer results from:
(1) termination of a lease upon default by the debtor when thetermination is permitted by the lease and applicable law; or
(2) enforcement of a security interest in compliance with Article9 of the Uniform Commercial Code.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-19
Statute of limitations; extinguishment of cause of action
Sec. 19. A cause of action with respect to a fraudulent transfer orobligation under this chapter is extinguished unless brought asfollows:
(1) If brought under section 14(1) of this chapter, an action isextinguished unless brought not later than the later of thefollowing:
(A) Four (4) years after the transfer was made or theobligation was incurred.
(B) One (1) year after the transfer or obligation was or couldreasonably have been discovered by the claimant.
(2) If brought under section 14(2) or 15(1) of this chapter, anaction is extinguished unless it is brought not later than four (4)years after the transfer was made or the obligation was incurred.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-20
Supplementary provisions
Sec. 20. Unless superseded by this chapter, the principles of lawand equity, including the law merchant and the law relating toprincipal and agent, equitable subordination, estoppel, laches, fraud,misrepresentation, duress, coercion, mistake, insolvency, or othervalidating or invalidating cause, supplement this chapter.
As added by P.L.2-2002, SEC.3.
IC 32-18-2-21
Uniformity of application and construction
Sec. 21. This chapter shall be applied and construed to effectuateits general purpose to make uniform the law with respect to thesubject of this chapter among states enacting it.As added by P.L.2-2002, SEC.3.