Penal Code 155 PC | Fraudulent Conveyance by a Judgment Debtor
Penal Code 155 PC – Fraudulent Conveyance by a Judgment Debtor
Being in debt can be scary, but trying to avoid paying what you owe through shady means will only make things worse. Penal Code 155 PC makes it illegal in California for a judgment debtor to hide or transfer assets to avoid paying court-ordered damages. This crime is known as fraudulent conveyance by a judgment debtor. I’ll explain what this law means, give some examples, and talk about the penalties so you stay out of trouble.
What is Penal Code 155 PC?
This law says it’s illegal for someone who lost a lawsuit and owes damages to transfer assets or property so they don’t have to pay. The purpose is to prevent dodging court orders and cheating victims who are owed restitution. Here’s what the law actually says:
Every person against whom a judgment has been rendered who fraudulently conceals, sells, or disposes of their property to avoid paying damages is guilty of a misdemeanor punishable by jail time of up to one year and/or a fine of up to $1,000.
So if you lose a case and are ordered to pay restitution, you can’t just give your assets to friends or relatives and claim you’re broke. That’s fraudulent conveyance by a judgment debtor.
What are some examples of violations?
Here are a few examples of how people could violate PC 155:
- Joan loses a lawsuit and is ordered to pay the plaintiff $20,000 in damages. But before paying, she transfers ownership of her car and expensive jewelry to her sister. She continues driving the car and wearing the jewelry.
- Mike is sued by his business partner and a judgment is entered against him for $50,000. Before the court can garnish his bank account, Mike empties his accounts and gives the cash to his brother to hide it from the plaintiff.
- Steve injured someone in a drunk driving accident and is sued. He loses the case and is ordered to pay $75,000 to the victim. But before he has to pay, Steve “sells” his truck and tools to a friend for $1 each to avoid losing them.
In each case, the defendant transferred assets to avoid a court judgment against them. That’s a violation of PC 155.
What if I transfer assets before a judgment?
You don’t necessarily have to wait for a judgment against you to violate this law. Transferring assets to avoid a potential judgment while your case is pending is also illegal. For example:
- Alice is sued for fraud and the case is pending. To protect her savings, she transfers money to her mother before the court can order damages against her.
Even though there’s no judgment yet, Alice is still illegally transferring assets to avoid a potential court order.
Penalties for Violating PC 155
Most violations of fraudulent conveyance laws are misdemeanors. Possible penalties include:
- Up to 1 year in county jail
- Fines up to $1,000
- Both jail time and fines
In some cases it can be charged as a felony if the assets are part of your business inventory or worth over $250. Then you could face:
- 16 months – 3 years in state prison
- Higher fines
The court also has power to void any transfers you made to avoid paying damages. So you can’t permanently hide assets using fraudulent conveyance.
How Do I Fight These Charges?
If you’re accused of fraudulent conveyance, don’t panic. There may be solid defenses to beat the charges, such as:
- No intent to defraud – The law requires you to specifically intend to avoid paying damages. If the transfers were for other reasons, you aren’t guilty.
- Duress – If you were forced or coerced to make the transfers, you may not be liable.
- No probable cause – If police lacked probable cause to arrest you, the case could get tossed.
An experienced criminal defense lawyer can evaluate the evidence against you and build a strong defense to avoid a conviction. Don’t wait to get help.
There are other similar crimes related to fraudulent conveyance in California:
- PC 154 – Fraudulent conveyance by a debtor to avoid paying debts.
- PC 531 – Participating in a fraudulent transfer.
- Check fraud – Writing bad checks to avoid obligations.
The penalties are similar for these offenses. If you’re charged with any type of fraudulent conveyance, you need a lawyer right away.
Stay Out of Trouble
Debt problems are common, but fraudulently transferring assets will only lead to criminal charges. If you’re ordered to pay damages, work in good faith with the court and creditors to resolve your debts. And if you’re accused of fraudulent conveyance, don’t say anything to police and call a lawyer immediately to protect your rights.