In bankruptcy terms the most common use of the term "transfer" refers to a fraudulent transfer of a debtor's assets to a third party to keep a creditor from repossessing the asset to satisfy the creditor's debt obligation
(See Also Preferential Debt Payment) A transfer is (in the most general terms) any method a debtor uses to dispose of their property. In bankruptcy terms the most common use of the term "transfer" refers to a fraudulent transfer of a debtor's assets to a third party to keep a creditor from repossessing the asset to satisfy the creditor's debt obligation, or a preferential transfer which is made to a creditor in the time period immediately prior to a bankruptcy filing which gives the creditor an unfair advantage over other creditors.
Fraudulent transfers may be set aside or cancelled if they are made 90 days before the debtor files for personal bankruptcy. If the fraudulent transfer involved the debtor's partners, relatives or officers they may be set aside if they occurred within one year of the debtor filing their bankruptcy petition. Fraudulent transfers, by their definition, are transfers that are done when the creditor was insolvent, under capitalized and could not make their debt payments. They also are done with the intention to defraud, hinder or delay the creditor from receiving debt payments. Fraudulent transfers can include transferring an asset and receiving less than the market value for the asset.
Section 547 of the United States Bankruptcy Code outlines the elements of a preferential transfer. Preferential transfers can be recovered by a debtor if the following are present: 1) the transfer existed; 2) the creditor benefited from the transfer; 3) the debt was a prior existing debt; 4) the debtor, at the time of the transfer, was insolvent; 5) the debtor made the transfer within 90 days before filing for bankruptcy (one year under certain circumstance); 6) the creditor was able to receive more than they might have received (if the transfer had not occurred) and the creditor had received their debt payments under Chapter 7 Bankruptcy liquidation.