§3307 Defenses, Liability, and Protection of Trans­feree

Summary

Lets the United States undo some transfers meant to hide assets, but protects people who took property honestly and paid fair value. If a transfer can be undone, the government can get a money judgment equal to the asset’s value at the time it was transferred, up to the debt amount. That judgment can be entered against the first person who got the asset or later recipients, except someone who honestly paid for it or anyone who got it from that honest person. An honest recipient who gave value can keep a lien, keep the asset, enforce any promise they received, or reduce the judgment by what they paid. Transfers also can’t be undone when they come from ending a lease after debtor default under the lease and law, enforcing a security interest under the Uniform Commercial Code, or certain insider actions (new value given after the transfer unless secured, ordinary business transfers, or good-faith efforts to rehabilitate the debtor that secure both new value and earlier debt).