The basic idea with a fraudulent transfer is that property is transferred for less than fair market value, in order to avoid paying a creditor 

There can be actual fraud (intent not to pay a creditor), or constructive fraud (a transfer for less than fair value although not actual fraud).  

The Connecticut Statute describes four situations

1.         Transfer made or obligation incurred by debtor when claim of creditor occurred before date of transfer or obligation, and debtor was insolvent (assets greater than liabilities) or became insolvent because of transfer or obligation, and no reasonably equivalent transfer (gave more than received) 52-522(f)(1)



Debtor gives property away worth $80,000 for $20,000 cash on 2/1/2017

On date debtor gives away property, debtor is insolvent, assets are $100,000 and liabilities/debts are $200,000

Creditor Alex was owed $70,000 when debtor gave away property


2.        Creditors claim occurred before transfer is made or obligation incurred.  Transfer made by debtor on antecedent debt (old debt).  Debtor was insolvent at time of transfer, and transfer to insider.  CGS 52-5252(f)(2). Insider had reasonable cause to believe that debtor was insolvent



   Debtor gives away property

   Property is given to an insider, typically a relative. 

  On date debtor gives away property, debtor is insolvent, assets are $100,000 and liabilities/debts are $200,000. 


  Insider debt was from a transaction which occurred over 6 months before transfer.  


  Insider/relative knew debtor’s financial condition. 


3.        Creditors claim occurred before transfer or obligation.   Debtor made transfer with actual intent to hinder, delay or defraud creditor.   CGS 52-522e(a)(1)


             In this situation, a creditor has to prove actual fraud.   The amount of the consideration given is not relevant. 


4.         Creditors claim occurred before transfer or obligation and either


a.       No receipt of reasonably equivalent value (partial gift) and


1.       Debtor was engaged or about to engage in business or transaction for which the remaining assets are unreasonably small in relation to business or transaction or

2.       Debtor intended to incur or reasonably should have believed that he would incur debts beyond his ability to pay

CGS 52-522e(a)(2)


    Debtor owed creditor $70,000 from a transaction in July of 2016

    On 1/2/2017, debtor gives someone a $100,000 piece of property to pay a $55,000 bill. 

    On 1/2/2017, debtor either

a.        Was about to enter into a large transaction for $250,000, knowing that he had no assets to pay off the bill

b.      Expected to enter into a large transaction, in the future, and knew that the bill(s) would not be paid

The statute of limitations to bring an action is 4 years, except that the special transfer rules for insiders provide for a statute of limitations of 1 year.

Robert M. Singer, Attorney at Law

2572 Whitney Avenue

Hamden, CT  06518


   Serving all of Connecticut



Provided below is the Connecticut statute which prohibits an insurance company from having subrogation rights against an owner or operator of an underinsured motor vehicle.

Sec. 38a-336b. Subrogation against owner or operator of underinsured motor vehicle prohibited. No insurer providing underinsured motorist coverage as required under this title shall have any right of subrogation against the owner or operator of the underinsured motor vehicle for underinsured motorist benefits paid or payable by the insurer.


James Jones is involved in an accident with Jimmy Johnson who causes a collision.  Jimmy Johnson has an Allstate Insurance with a policy coverage of $20,000 per person.   Allstate pays the full $20,000 to cover the claim.   James has $100,000 coverage per person, of underinsured motorist claim. James claims and receives payment under his underinsured motorist coverage, under a State Farm policy.   There is no right to subrogation as there was a payment on the underinsured motorist coverage.

(Without the prohibition, State Farm would be subrogated to the rights of James Jones, against Jimmy Johnson)

NOTE – The prohibition only applies to cases in which there is payment for underinsured motorist coverage.  The statute does not apply to “uninsured motorist” coverage.

Robert M. Singer, Attorney at Law

2572 Whitney Avenue

Hamden, CT  06518


   Serving all of Connecticut