Kathleen is thinking about petitioning for bankruptcy. Before doing so, she sells her prize stallion that is worth $10,000 to Julia for $100 with the understanding that Julia will sell the stallion back for the same price in the future. The sale of the stallion is an example of a(n)

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This sale is considered a fraudulent transfer because Kathleen is selling a valuable asset for significantly less than its worth in an attempt to protect it from being included in her bankruptcy estate. This action is taken with the intent to defraud, delay, or hinder her creditors.

Kathleen Is Thinking About Petitioning for Bankruptcy