When prospective clients call about a possible fraudulent transfer, they often start by worrying about whether their situation counts. They think their claim is too informal, too small, too unresolved, or the wrong kind of debt to fit under the statute. Almost always, they are wrong to worry.
The Texas fraudulent transfer laws define “claim” about as broadly as a legal term can be defined. If somebody owes you money or owes you property, you probably have a claim.
You Do Not Need a Judgment
A judgment is a court’s official confirmation that money is owed. Many of our clients have one. Many do not. You do not need one to bring a fraudulent transfer case.
If you have a right to payment from somebody, that is a claim. The fact that no court has yet ruled on it is irrelevant. The statute was written that way on purpose. Debtors do not wait for judgments before they start hiding. The law does not make creditors wait either.
It Does Not Have to Be a Specific Number
The claim can be for a fixed dollar amount. It can also be for an amount that is still being worked out. If you and the debtor are in the middle of a dispute about how much exactly he owes, that does not stop your fraudulent transfer case.
We have brought cases where the underlying debt was still being quantified in another courtroom. The two tracks proceed in parallel. The fraudulent transfer case does not wait.
It Can Be Vigorously Disputed
The debtor can be denying he owes you anything. He can be defending the underlying case aggressively. The fraudulent transfer case still moves forward.
We see this constantly. The debtor’s lawyers are on one track arguing about whether he ever owed anything. On a different track, the same lawyers are trying to explain why he deeded his commercial property to his wife the week after the lawsuit was filed. Both cases keep going. The contradictions between the defenses are often the most useful evidence in the case.
It Does Not Have to Be Due Yet
A claim that is not yet due is still a claim. If you hold a promissory note that matures in six months, you have a claim today. If a debtor sees a large obligation coming and starts moving assets ahead of it, that is exactly the situation TUFTA was written for.
The same applies to contingent claims. A claim that is contingent on something happening (a contract default, a triggering event, a future judgment) still qualifies. The contingency does not disqualify the claim. It is just a fact about its timing.
Kinds of Claims We See Most Often
We have built fraudulent transfer cases on a wide range of underlying debts over the years. The list below covers the most common ones, but the statutory definition of “claim” is broad enough to reach types of obligations the list does not mention.
Unpaid invoices and open accounts from business transactions. Promissory notes, whether secured or unsecured, signed by entities or by individuals. Personal guarantees on business obligations. Deficiency balances after foreclosure or repossession. Breach of contract claims from failed business deals. Construction and subcontractor payment disputes. Tort judgments for personal injury, property damage, or professional malpractice. Disputes between business partners where one of them stripped the company before leaving. Fraud claims where the debtor lied and then also moved his assets.
If somebody owes you money or owes you something of value, the question of whether you have a “claim” under TUFTA is usually answered easily and in your favor. The threshold issue is rarely what blocks a case from going forward.
The Question That Actually Limits a Case
The questions that actually determine whether a fraudulent transfer case is viable run downstream of the claim threshold. Those questions are about the transfer itself.
What was transferred. When the transfer happened. To whom. And whether the records are still findable enough to prove the case.
A lot of clients spend too much time worrying about whether their situation qualifies and not enough time getting to a lawyer. The qualifying question is rarely the problem. The timing question usually is.
Frequently Asked Questions
What if the debtor filed for bankruptcy and my claim is now a bankruptcy claim?
Your claim still qualifies. The bankruptcy adds layers (proofs of claim, the trustee's avoidance powers, dischargeability issues), but the underlying claim is still a claim. Call us early if a bankruptcy is in the picture.
Does a business's trade debt qualify?
Yes. Open accounts, unpaid invoices, supply contracts. All of these are claims under TUFTA. Most of our creditor clients are businesses pursuing trade debt.
What if my claim is contingent on something happening in the future?
A contingent claim is still a claim under TUFTA. The contingency affects valuation and remedies, not whether you can be a creditor.
What if I am a guarantor who has not yet been called on the guarantee?
You are a contingent creditor of the borrower (because if the guarantee is called, you have a right of indemnity). Whether that contingent claim supports a fraudulent transfer case depends on the facts.
Does a verbal agreement count?
Yes, if the agreement created an enforceable obligation. Verbal agreements can be harder to prove than written ones, but the fraudulent transfer claim survives. Many of our underlying debts involve some mix of writings and verbal understandings.
What about a judgment from another state?
A foreign judgment is a claim. Domesticating the judgment in Texas under the Uniform Enforcement of Foreign Judgments Act is often a parallel step to the fraudulent transfer case.
TUFTA's definition of "claim" is wide, but specific kinds of claims have specific wrinkles. This page describes the general rule. A lawyer needs to look at your facts before you decide how to proceed.
The Texas Fraudulent Transfer Statutes are complicated affairs. These pages are meant to explain the law in terms that are as simple as we can make them. Sometimes we have ignored limited exceptions and other quirks in the law so that the general concepts could be conveyed clearly. Your situation needs to be carefully analyzed. No two situations are identical and you need legal advice before making an important decision. Use this website as a guide only.