Legal Definitions - fraudulent sale

Definition: A sale made to defraud the seller's creditors by converting into cash property that should be used to satisfy the creditors' claims.

Example: John owes $10,000 to his creditors. He sells his car to his friend for $1,000, even though the car is worth $5,000. John's friend is aware of the situation and agrees to help John hide the car from his creditors. This is a fraudulent sale.

Explanation: In this example, John is trying to hide his assets from his creditors by selling his car for much less than its actual value. This is illegal and unethical because it deprives John's creditors of the money they are owed. John's friend is also participating in the fraud by helping him hide the car. This type of sale is not allowed by law and can result in legal consequences for both parties involved.