North Carolina Fraudulent Transfer Act Hopefully Soon to be Amended and Called Voidable Transactions Act

February 16, 2015

In the current legislative session of the North Carolina General Assembly, it is anticipated that amendments to the North Carolina Fraudulent Transfer Act will be enacted to make long needed changes to that statute.

North Carolina’s Fraudulent Transfer Act, codified in Article 3A of Chapter 39 of the General Statutes, is based upon the Uniform Fraudulent Transfer Act that was promulgated by the Uniform Law Commission in 1984 and enacted in 43 states, including North Carolina, the District of Columbia and the U.S. Virgin Islands. That act replaced the very similar Uniform Fraudulent Conveyance Act, which was promulgated in 1918 and remains in force in two states (New York and Maryland) as of 2014, and was drafted to make it more consistent with the Bankruptcy Code which was enacted in 1978.

Last year, the Uniform Law Commission promulgated 2014 amendments to the Uniform Fraudulent Transfer Act which are the first made to the act since its original promulgation. The amendments address narrowly-defined issues and are not a substantive revision. The principal amendments are as follows: