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Avoidance Actions in Fort Lauderdale

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Are you dealing with an avoidance action issue in Florida? Our legal team has 70+ years of combined experience dealing with bankruptcy, student loan debt, and other financial issues, and we can help you, too. We are comfortable handling complex cases and are committed to providing our clients with the personalized attention they need and deserve. If you choose to work with us, you can expect one-on-one attention and sound legal counsel each step of the way.

Understanding Avoidance Actions

A bankruptcy trustee has the power to avoid and recover any transferred asset or monies to third parties or insiders that may be avoidable under applicable law. This means certain transfers that occurred in the past may be undone, if there is a legal reason to do so. In order to avoid and recover such property or money from a third party, the bankruptcy trustee is required to commence an adversary proceeding to determine that the transferred property is subject to avoidance, and that the property or money can be recovered from the party being sued.

There are three primary types of transfers that can be avoided:

  • Fraudulent Transfers: These transfers do not necessarily have to involve fraud or even fraudulent intent. There are two types of fraudulent transfers – transfers made on account of actual fraud and transfers made on account of constructive fraud. Transfers made on account of actual fraud or those that were made with the intention to hinder, delay or defraud creditors. Transfers made on account of constructive fraud are usually transfers made for no consideration or less than an equivalent value, made at a time in which the debtor’s liabilities exceeded the debtor’s assets or when the debtor was not paying creditors when the debtor’s debts came due. There are many nuanced rules and exceptions to these rules, and it is important to seek the advice of an attorney with knowledge of fraudulent transfer law.
  • Post-Petition Transfers: These are transfers of property of the bankruptcy estate made after the bankruptcy is filed and without the permission of the bankruptcy trustee or the Bankruptcy Court. These types of transfers are rare but are applicable under specific circumstances.
  • Preferential Transfers: Preferential transfers are probably the most misunderstood type of pre-bankruptcy transfer. Essentially, transfers that are perfectly legal and acceptable outside of bankruptcy become problematic inside of bankruptcy. Transfers made to a creditor within a certain time period before bankruptcy (either 90 days or 1 year, depending on the relationship between the debtor and the creditor), on account of an antecedent debt, may be avoidable by a trustee, and the trustee may be able to recover money from the creditor/transferee. Numerous exceptions apply, and again, it is important to seek the advice of an attorney with experience in preferential transfer litigation.

Let LSS Help You

Our attorneys at LSS Law have litigated hundreds of these types of avoidance actions, representing both plaintiffs and defendants. Our experience representing bankruptcy trustees is invaluable to our clients who find themselves on the other end of such a lawsuit, and we want to help you too.

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