Asset Protection and Clawback Provisions

When entering any transaction, especially related party transactions, consider the clawback provisions under the Bankruptcy Act, the 2 main ones being:

Section 120. Undervalued transactions see

http://www.austlii.edu.au/au/legis/cth/consol_act/ba1966142/s120.html

Section 121. Transfers to defeat creditors

See http://www.austlii.edu.au/au/legis/cth/consol_act/ba1966142/s121.html

Most people forget about the state legislation as well:

e.g. Conveyancing Act 1919 (NSW)

Section 37A. Voluntary alienation to defraud creditors voidable

See http://www.austlii.edu.au/au/legis/nsw/consol_act/ca1919141/s37a.html

Each State has its own legislation similar to the s37A

What the above sections mean is that a transaction entered into with the intent of defeating creditors or putting property out of reach of the trustee in bankruptcy (if you were to go bankrupt) could be attacked. This can even apply to future creditors.

So, take care in how you do things, especially related party transfers such as changing title on property, declaring trusts or moving cash.

Discussion at

https://propertychat.com.au/community/threads/legal-tip-2-asset-protection.224/

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