No debtor should be permitted to conceal or dispose of his property for the purpose of preventing his creditors from satisfying their legal claims. In ethical terms which have become classic, a debtor should be just to his creditors before he can rightfully be generous with his property for the benefit of others. The original and primary purpose of bankruptcy legislation has been, and continues to be, a just distribution of the bankrupt's property among his creditors.
To help effectuate the purpose of bankruptcy legislation, the fraudulent conveyance is of major importance in three distinct respects. In the first place, the so-called fraudulent conveyance or concealment constitutes an act of bankruptcy. In the second place, the trustee in bankruptcy is empowered by the Bankruptcy Act to set aside such transactions and bring the property back into the bankrupt's estate as an asset for the payment of claims of creditors. In the third place, the debtor's fraudulent conveyance can be used to deprive him, as a bankrupt, of his discharge. As the title to this article indicates, the writer has undertaken only to survey these three facets of the field of the fraudulent conveyance; there is no attempt to give an exhaustive treatment.
Paul J. Hartman,
A Survey of the Fraudulent Conveyance in Bankruptcy,
17 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vlr/vol17/iss2/2