Can I transfer a debt during a lawsuit?
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Can I transfer a debt during a lawsuit?
I am being sued by my city for a past real estate matter. The debt was for a
business. However, the property was in my name. Can I transfer the debt to the
company name even though we’re already headed to court? Also, I have a pending contract which will pay off the entire balance. I won’t get the money for 15 months though. If I show them proof, will they allow me to wait 15 months to pay?
Asked on September 27, 2018 under Business Law, Ohio
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
1) No, you can't transfer the debt while there is a pending (ongoing or in the works) lawsuit: dong so would be regarded as a transfer made to defraud crdeditors and could be vacated (set aside) under one or more of several legal doctrines, possibly exposing you to additional liabltiy in the process.
2) The other side--the city--could agree to give you time to pay but is not required to. In my experience, they are likely to let you make payment over time starting more or less now--e.g. 5% of the amount owed each month for the next 20 months, or 5% per month for 15 months, then a balloon payment of the last 25%--but are not likely to let you pay nothing for 15 months, since if you end up not getting paid or getting paid and not paying them, they waited for more than a year for nothing and have to essentially start all over getting money from you. When someone asks for over a year to start paying, that's generally seen as delaying tactic or trick, nothing more.
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