Six months before filing for bankruptcy, Shirley sold her new car to her brother for $100 so that her creditors could not claim it. The market value of the car was $8,000 at the time of the sale. Under these circumstances, the transfer is _____.

Question

Quizplus · Accepted Answer

If a debtor transfers property or incurs an obligation with intent to hinder, delay, or defraud creditors, the transfer is voidable by the trustee. Similarly, transfers of property for less than reasonable value are voidable by the trustee. By selling an $8000 car for $100, Shirley did not receive fair consideration. Hence, the transfer is voidable by the trustee.

Six Months Before Filing for Bankruptcy, Shirley Sold Her New