Look-back windows for voidable transfers, state by state

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The same material, read aloud and told more loosely than it is written. Nothing is said in it that this page does not also say.

UVTA, UFTA and the rest

Most states run the same uniform rule under one of two names, and a handful are built on something else entirely.

One idea travels under two words. Some states say a transfer made with actual intent to hinder, delay or defraud a creditor is voidable, which is New York's word under DCL 273(a)(1)¹. Others, Florida among them, call the same transfer fraudulent, as section 726.105(1)(a) does, and Florida still cites its chapter 726 as the Uniform Fraudulent Transfer Act under Fla. Stat. 726.101². One set of states renamed its acts from fraudulent to voidable transactions. The test did not change.

New York rebuilt its law recently. A 2019 act repealed the old article 10 of the Debtor and Creditor Law and put a new one in its place, signed on December 6, 2019 as chapter 580. It takes effect 120 days after becoming law, and it reaches only transfers made and obligations incurred on or after that date. For a transfer made before it, this page states no period. What governs the older transfer is not something this page can settle, and it will not guess at it.

A few states do not sit on the uniform frame at all. Maryland makes a conveyance with actual intent to hinder, delay or defraud fraudulent as to present and future creditors, under Md. Code, Com. Law 15-207³. Virginia makes such a transfer void rather than voidable under Va. Code 55.1-400⁴. Louisiana does the strangest thing of all: its Civil Code lets an obligee annul an act of the obligor, made after the obligee's right arose, that causes or increases the obligor's insolvency, under La. Civ. Code art. 2036⁵, and intent is no part of it.

Which state's clock applies is itself a rule worth knowing before the clock matters. Under DCL 279⁶ a New York claim is governed by the law of the place where the debtor sits when the transfer is made, and for an individual that is the principal residence. That location is fixed at the moment of the transfer, not by where the debtor lands later.

Four years and one year

The common pattern is four years from the transfer, one more from discovery for the intent claim, and one year for paying an insider. Call it common, not national, because the outliers are the point of this section.

In Florida and New York the actual-intent claim runs four years after the transfer or, if later, one year after it was or could reasonably have been discovered, under Fla. Stat. 726.110(1)⁷ and DCL 278(a)⁸. It is the later of the two dates that counts. The value-based claim, where the debtor got less than reasonably equivalent value, runs four years flat with no discovery extension, under Fla. Stat. 726.110(2) and DCL 278(b). And the claim for paying an insider on an old debt while insolvent runs one year from the transfer, under Fla. Stat. 726.110(3) and DCL 278(c). Set 278(a) and 278(b) side by side and the missing discovery clause in the second is the whole difference.

That same four-years-or-one-from-discovery appears in the acts of many states and the District of Columbia, in sections such as Cal. Civ. Code 3439.09⁹, Tex. Bus. & Com. Code 24.010 and Ohio Rev. Code 1336.09¹⁰. For land, the starting gun is fixed in Florida and New York the same way: a transfer of real property is made when it is so far perfected that a good-faith purchaser from the debtor cannot take an interest superior to the transferee's, under Fla. Stat. 726.107(1)(a)¹¹ and DCL 275(a)(1)¹². Nebraska and New Mexico set the identical rule for when a transfer is made, under Neb. Rev. Stat. 36-807¹³ and NMSA 56-10-20¹⁴, which is where their clocks start. In Florida, a transfer that could have been perfected and was not is treated as made immediately before the action is commenced, under Fla. Stat. 726.107(2). So a transfer nobody recorded does not quietly run out its clock.

Now the outliers. Alabama allows ten years after a transfer of real property for an actual-intent claim, and six years after a transfer of personal property, under Ala. Code 8-9A-9¹⁵. Maine allows six years, or one from discovery if later, under 14 M.R.S. 3580¹⁶. Mississippi allows three, under Miss. Code 15-3-115¹⁷. Montana allows four years, or two from discovery, under MCA 31-2-341¹⁸, with two years for its 31-2-334(2) claim. Wyoming allows two years, or six months from discovery, with six months for its third claim, under Wyo. Stat. 34-14-210¹⁹. Tennessee gives its third claim four years rather than one, under Tenn. Code 66-3-310(3)²⁰. Michigan points to its Revised Judicature Act, where section 5813 gives other personal actions six years and section 5855 allows two years after discovery of a fraudulently concealed claim, under MCL 600.5813²¹ and MCL 600.5855²².

Two states cap the whole thing. California adds a seven-year outer limit: whatever else applies, a claim dies if no action is brought or levy made within seven years after the transfer, under Cal. Civ. Code 3439.09(c). Louisiana runs one year from when the obligee learned or should have learned of the act, and never after three years from it, under La. Civ. Code art. 2041²³. Virginia gives five years from recordation for a gift or a conveyance not on valuable consideration, avoided for that cause alone, under Va. Code 8.01-253²⁴. For a Virginia claim of actual intent, this page states no period, because no section before it fixes one.

Two details before the blanks. Texas does not count time a creditor is under a legal disability, such as being younger than 18, when the period starts, under Tex. Bus. & Com. Code 24.010(c). And several states set separate, often far shorter rules for transfers into particular trusts: Nevada carves spendthrift trusts out of its general period under NRS 112.230(2)²⁵, and Wyoming measures a trust claim in 120 days from notice under Wyo. Stat. 34-14-210(b). The timing of transfers after a judgment is a close relative of all this, treated in the window that remains after a judgment.

Some states this page has not reached. Alaska, Maryland, Minnesota, South Carolina and Kentucky are blank here because no section before it fixes a period. Utah does fix one, at Utah Code 25-6-305²⁶: four years, or one from discovery if later, for one claim; four years for another; and one year for a third. A blank on the chart is a state the library has not answered, not a state with no limit.

The trustee's reach

If the debtor files for bankruptcy, the clocks change hands. The trustee has one window of its own and borrows the state's, and one route that runs ten years.

The petition freezes collection first. Once a case is filed, the stay covers any act to collect a claim that arose before it, and the commencement or continuation of a proceeding against the debtor, under 11 U.S.C. 362(a)(6)²⁷ and 362(a)(1). What was moving stops.

The trustee may then avoid a transfer made within two years before the petition, if it was made with actual intent or for less than reasonably equivalent value while insolvent or in a related condition, under 11 U.S.C. 548(a)(1)²⁸. For the two-year rule a transfer is made when it is perfected against a bona fide purchaser, and a transfer not perfected before the case began is treated as made immediately before the petition, under 11 U.S.C. 548(d)(1). But two years is a floor, not a ceiling. A trustee may also avoid any transfer an unsecured creditor holding an allowable claim could avoid under applicable law, under 11 U.S.C. 544(b)(1)²⁹, which drags the whole state window into the bankruptcy case. Where such a creditor has four years, or ten, the trustee reaches the same distance. And for a transfer into a self-settled trust of which the debtor is a beneficiary, made with actual intent, the reach is ten years under 11 U.S.C. 548(e)(1).

The trustee also runs against a clock of its own. An avoidance action may not be commenced after the earlier of two times under 11 U.S.C. 546(a)³⁰: the later of two years after the order for relief or one year after the first trustee is appointed within those two years, or the moment the case is closed or dismissed. What is avoided is recovered from the first transferee or the person the transfer benefited, and from later transferees, under 11 U.S.C. 550(a)³¹, except one who took for value, in good faith and without knowledge of the voidability, under 11 U.S.C. 550(b). The buyer who paid real money and knew nothing keeps what he bought.