What signals a fraudulent transfer? Fourteen clues courts look for include:

1.             Transfers not in the debtor’s ordinary course of business or usual pattern for disposing of assets.

2.             Transfers of assets for inadequate consideration when the transfer creates or adds to the debtor’s insolvency.

3.             Secrecy in the transaction.

4.             An unduly hasty transfer.

5.             Transfer to a family member, friend or close business associate.

6.             Where a buyer of a business allows the seller to retain managerial control, or a home buyer allows the seller to remain in occupancy.

7.             Failure of the parties to use independent counsel on transactions where independent representation is customary or reasonable.

8.             Extraordinary or superficial attempts to make the transfer appear fair and reasonable.

9.             Unusual possession or use of the asset by the seller after the transfer.

10.          Transferring assets outside the debtor’s jurisdiction.

11.          Failure to promptly record deeds or title documents.

12.          Mortgages or liens for services rendered in the past, or where such services have questionable value.

13.          Failure of the debtor or transferee to accurately record loan transactions or repayments.

14.          Failure by the transferor to collect overdue loans secured by the property.

These activities of fraud simulate an actual transfer of property but are not intended to legitimately divest the transferor of his property. Commonly, a transferee holds title in his name with the tacit understanding that title will be later reconveyed when the creditor threat passes. Meanwhile, the transferee usually allows the property to be used as the transferor wishes.

These factors alone do not conclusively prove fraud or a fraudulent transfer; however, they may easily persuade a court to find such a questionable transaction a fraudulent transfer and hence recoverable by the creditor.