Can I transfer a debt during a lawsuit?

UPDATED: Oct 1, 2022

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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


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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