Fraudulent Transfer & Conveyance Lawyer in Houston

Representing Creditors and Defendants in TUFTA claims Across Texas

When a debtor moves money, property, or other assets to put them beyond a creditor’s reach, Texas law provides a remedy. The Texas Uniform Fraudulent Transfer Act (TUFTA) allows creditors to pursue and void those transfers – but it also provides real defenses for those accused of receiving or making them.

At Hendershot Cowart P.C., our attorneys represent both sides. We counsel judgment creditors who need to pursue transferred assets, and we defend debtors, business owners, and transferees against TUFTA claims. Whether you are trying to collect on a judgment or respond to a fraudulent transfer lawsuit, our Houston business attorneys can help you understand your options and build a strategy.

On This Page:

• What Is a Fraudulent Transfer or Conveyance?
• Two Types of Fraudulent Transfer Under TUFTA
• When Do Fraudulent Transfer Claims Arise? Common Scenarios
• How Hendershot Cowart P.C. Can Help You Pursue a TUFTA Claim
• Defending Against a TUFTA Claim
• Statute of Limitations for TUFTA Claims
• TUFTA vs. Federal Bankruptcy Law
• Frequently Asked Questions

Call (713) 783-3110 or contact us online to speak with a fraudulent transfer attorney in Houston.

What Is a Fraudulent Transfer or Conveyance?

A fraudulent transfer – also called a fraudulent conveyance – is any transfer of assets or incurrence of an obligation that a debtor makes to hinder, delay, or defraud a creditor. The two terms mean the same thing; “conveyance” is an older term drawn from common law that courts and statutes still use interchangeably with “transfer.”

Texas law governing fraudulent transfers is found in Chapter 24 of the Texas Business and Commerce Code, known as the Texas Uniform Fraudulent Transfer Act (TUFTA). TUFTA is a civil law – not a criminal statute – designed to stop debtors from moving assets beyond a creditor's reach.

Under TUFTA, a fraudulent transfer that is proven is voidable, meaning a court can undo it so the assets are available to satisfy the creditor’s claim.

How TUFTA Defines a “Transfer”

Under TUFTA, a "transfer" covers virtually any way of parting with an asset or an interest in one – whether direct or indirect, voluntary or not. Paying off a debt, signing over a lease, releasing a claim, or placing a lien on property all qualify.

What Counts as an “Asset”

An asset is any property owned by the debtor that is available to satisfy a creditor’s claim. Assets can be tangible – real estate, vehicles, equipment – or intangible, such as bank accounts, business interests, intellectual property rights, contracts, and claims for payment.

TUFTA specifically excludes:

• Property already encumbered by a lien (to the extent of the lien value)
• Property jointly owned by the debtor and the debtor’s spouse (unless both spouses are jointly liable to the same creditor)
• Property exempt from collection under Texas law

These exclusions exist because another party already holds an ownership interest in the property, which limits a creditor’s ability to reach it in the first place.

Two Types of Fraudulent Transfer Under TUFTA

TUFTA recognizes two broad categories of fraudulent transfer: actually fraudulent transfers, which require proving the debtor’s subjective intent, and constructive fraudulent transfers, which do not require proof of intent at all.

Actually Fraudulent Transfers

A transfer is actually fraudulent if the debtor made it with actual intent to hinder, delay, or defraud any creditor, whether the creditor's claim arose before or after the transfer. 

Because direct evidence of intent is rarely available, Texas courts allow creditors to prove fraudulent intent through circumstantial evidence. These are the factors, as defined by TUFTA, that a court may weigh when evaluating intent:

• Transfer to an insider – such as a relative, business partner, director, officer, or other affiliates of the debtor
• Retained possession or control – the debtor kept using or controlling the transferred property after the transfer
• Concealment – the transfer or obligation was hidden from creditors
• Pending lawsuit or threat of suit – the debtor had been sued or threatened with suit before the transfer
• Transfer of substantially all assets – the debtor stripped most of what they owned
• Abscondment – the debtor fled or disappeared
• Removal or concealment of assets – not just the transfer but the assets themselves were concealed
• No reasonably equivalent value received – the debtor transferred property for less than it was worth
• Insolvency at or shortly after the transfer
• Timing near a substantial debt – the transfer occurred shortly before or after the debtor incurred a large obligation
• Transfer of business assets to a lienor who then transferred them to an insider

No single factor is conclusive, and no single factor creates a presumption of fraud. But when several are present together, a jury may reasonably infer fraudulent intent. 

Constructive Fraudulent Transfers

Unlike actual-fraud claims, constructive fraudulent transfers under TUFTA require no proof of intent. The question is simply whether the debtor received fair value for what was transferred while they were insolvent. 

There are three constructive fraud claims under TUFTA:

1. Present and future creditors: A transfer is fraudulent if made without receiving reasonably equivalent value in exchange, and the debtor either (a) was engaged or about to engage in a business for which remaining assets were unreasonably small, or (b) intended to incur, or believed they would incur, debts beyond their ability to pay as they became due. This protects both present and future creditors and requires proof that the debtor's financial condition was inadequate for their business activities or debt obligations.
2. Present creditors only: A transfer is fraudulent if made without reasonably equivalent value and the debtor was insolvent at the time or became insolvent as a result. Only creditors whose claims existed before the transfer may bring this claim.
3. Insider preference (present creditors only): A transfer to an insider for a pre-existing debt is fraudulent if the debtor was insolvent at the time and the insider had reasonable cause to believe the debtor was insolvent. This claim has a shorter limitations period: one year from the date of the transfer.

What Is “Reasonably Equivalent Value”?

TUFTA defines reasonably equivalent value as a transfer within the range of values for which the debtor would have sold the assets in an arm’s-length transaction. The Texas Supreme Court has held that when a transferee fully performs under a lawful, arm’s-length contract for fair market value and provides consideration with objective value at the time of the transaction, this standard is satisfied – even if the debtor was insolvent at the time.

When Do Fraudulent Transfer Claims Arise? Common Scenarios

Fraudulent transfer claims most often surface when a debtor is facing – or anticipates – a creditor’s claim and moves assets in response. 

Here are the situations our attorneys see most frequently:

• Transfers to family members after a lawsuit is filed. A judgment debtor conveys real property to a spouse, child, or sibling shortly after litigation begins – often for nominal or no consideration.
• Business owner shifts assets to a new entity. The owner creates a new LLC or corporation, transfers the operating business’s assets to it, and continues operating – leaving the old entity with only liabilities for creditors to pursue.
• Insider repayments while insolvent. A business repays a loan from a family member or business partner ahead of arms-length creditors when the business is already unable to pay its debts. This can trigger both TUFTA and federal bankruptcy avoidance claims.
• Transfer of substantially all assets before incurring a large debt. An owner strips a company of its assets before guaranteeing a substantial obligation, leaving the guarantor without resources to cover the debt.
• Transfers on the eve of bankruptcy. A debtor moves assets shortly before filing for bankruptcy protection. Both TUFTA and the federal Bankruptcy Code address these transfers, though with different look-back periods (see TUFTA vs. Federal Bankruptcy Law below).

How Hendershot Cowart P.C. Can Help You Pursue a TUFTA Claim

If you believe a debtor has transferred assets to put them beyond your reach, you have legal options – but acting on them requires moving quickly and strategically.

You must file an independent lawsuit. A TUFTA claim cannot be added as a motion in your existing case. Our attorneys can evaluate the transfer, identify the strongest theory of liability – actual fraud, constructive fraud, or both – and file the independent action required to pursue relief.

Once a claim is established, the remedies available to you include:

• Avoidance of the transfer: The court unwinds the transaction to the extent necessary to satisfy your claim
• Attachment and provisional remedies: freezing the transferred asset while the case proceeds
• Injunctive relief: preventing the debtor or transferee from making further transfers
• Receivership: a court-appointed receiver takes charge of the assets to preserve their value
• Levy of execution: If you already hold a judgment, the court can order it enforced directly against the transferred asset
• Monetary damages: When an asset can no longer be recovered, the court may award a money judgment capped at the lesser of the asset's value or the amount of your claim

Time is a factor. TUFTA claims are subject to strict time limitations – as short as one year for certain insider transfers – and assets can continue to move while you wait. The sooner you act, the more options you have to recover what is owed.

Call (713) 783-3110 or contact us online to speak with a fraudulent transfer attorney in Houston.

Defending Against a TUFTA Claim

Being named in a fraudulent transfer lawsuit does not mean the transfer was fraudulent. TUFTA provides real defenses – and the strength of your position depends on the facts of the transaction and how quickly you engage counsel.

At Hendershot Cowart P.C., our attorneys represent transferees, business owners, and debtors facing TUFTA claims. We evaluate the transaction, identify the strongest available defenses, and build a strategy to protect you. Those defenses include:

• You received the transfer in good faith and paid fair value. A transferee who took the asset in good faith and paid reasonably equivalent value is protected from avoidance under TUFTA. If you paid a fair price in an arm's-length transaction without knowledge of the debtor's intent, the transfer may not be voidable against you.
• The transaction was for fair value. For constructive fraud claims, demonstrating that the debtor received reasonably equivalent value is a complete defense. Documentation of the transaction price and the asset's fair market value at the time of transfer is critical – this is often where expert valuation plays a decisive role.
• The debtor was solvent at the time. Insolvency is a required element for constructive fraud claims. If the debtor was financially healthy at the time of the transfer and remained so afterward, the claim fails on this element.
• The creditor's claim did not exist at the time of the transfer. TUFTA only reaches creditors whose claims arose before or within a reasonable time of the transfer for actual-fraud claims, and only present creditors for constructive-fraud claims. If the creditor's claim arose well after the transfer, it may fall outside TUFTA's reach entirely.
• The statute of limitations has run. TUFTA claims are time-limited, and an expired limitations period is a complete bar to the claim. 

If you have received notice of a TUFTA claim or believe one may be coming, contact our attorneys before responding. Early involvement gives us the most options to protect you.

Statute of Limitations for TUFTA Claims

TUFTA claims must be filed within a limited period of time, which varies according to the type of claim.

• Actual fraud claims must be filed withinfour years of the transfer, or one year from discovery, whichever is later
• Constructive fraud claims: within four years of the transfer
• Insider preference claims: within one year of the transfer

TUFTA vs. Federal Bankruptcy Law

If a debtor files for bankruptcy, fraudulent transfer claims can be pursued under either TUFTA or the federal Bankruptcy Code – and the two frameworks can run in parallel. 

The key differences to know:

• Look-back period: TUFTA reaches transfers up to four years back. The federal Bankruptcy Code reaches only two years before the petition date. However, a bankruptcy trustee can use TUFTA to access the longer window, so transfers that fall outside the federal two-year period may still be reachable under TUFTA's longer window
• Who brings the claim: Under TUFTA, a creditor files the lawsuit. In bankruptcy, the trustee pursues claims on behalf of the estate.
• Defenses: Full TUFTA defenses – including the good-faith transferee defense – apply in state court. When the trustee invokes TUFTA in bankruptcy, those same state law defenses generally remain available to the transferee.

Both creditors and transferees benefit from counsel who understands how TUFTA and the Bankruptcy Code interact – and how to use that interplay to their advantage.

Frequently Asked Questions

What is the difference between fraudulent transfer and fraudulent conveyance?

There is no legal difference. The two terms describe the same concept. “Fraudulent conveyance” is an older term rooted in common law; “fraudulent transfer” is the term used in the Texas Uniform Fraudulent Transfer Act. Courts, attorneys, and legal databases use both.

Does a creditor have to prove the debtor intended to commit fraud?

Not always. For actual fraud claims, intent is required – but it can be proven through circumstantial evidence. For constructive fraud claims, no intent is required. The creditor only needs to show the transfer was made without reasonably equivalent value and that the debtor was insolvent or financially impaired at the time.

Can I pursue a fraudulent transfer claim after I already have a judgment?

Yes – but you must file a separate lawsuit. A TUFTA claim cannot be added as a post-judgment motion in the original case. Once you have a judgment and discover that the debtor transferred assets before or after suit was filed, your attorney can file an independent TUFTA action to void those transfers and reach the assets.

What happens if the transferred asset has already been sold to someone else?

If the asset was transferred to a good-faith purchaser for value, avoidance of the original transfer may not be practical. In that situation, TUFTA allows the court to enter a monetary judgment against the transferee for the value of the asset, capped at the amount of the creditor’s claim.

How long do I have to bring a TUFTA claim?

The limitations period depends on the type of claim. 

• Actual fraud claims must be brought within four years of the transfer, or within one year of when the creditor discovered or reasonably could have discovered it – whichever is later. 
• Constructive fraud claims must be brought within four years of the transfer. Insider preference claims only have a one-year window from the date of the transfer. 

If you are close to a deadline, contact an attorney immediately.

Can TUFTA be used against me if I received assets from a debtor in good faith?

If you received assets in good faith and paid reasonably equivalent value – meaning you paid a fair price in an arm’s-length transaction without knowledge of the debtor’s intent to defraud – TUFTA provides a defense. The statute is not designed to punish innocent purchasers. However, if you are an insider – a relative, partner, or business associate of the debtor – courts will scrutinize the transaction more closely, and the burden of establishing good faith is higher.

Contact Our Fraudulent Transfer Attorneys in Houston

Whether you are a creditor pursuing assets that have been moved out of reach, or a business owner or transferee defending against a TUFTA claim, the attorneys at Hendershot Cowart P.C. can help. Our team handles fraudulent transfer matters on both sides of the dispute – from pre-litigation strategy through trial.

Based in Houston, we represent clients in TUFTA matters throughout Texas.

Call (713) 783-3110 or contact us online to schedule a consultation with a fraudulent transfer attorney.