Debtor Transfers Assets to Relatives to Evade Debt: Voiding the Transfers — While a large debt remains unpaid, the debtor transfers houses, land and cars one after another to a spouse, children and relatives within a short period, on paper as gifts or low-price sales. By the time the creditor sues and enforces, almost no assets stand in the debtor’s name. The question is whether those transfers can be declared void to pull the assets back.
Legal basis and the nature of the issue
The Civil Code 91/2015/QH13 declares void sham civil transactions designed to conceal another transaction or to evade obligations toward third parties (Article 124), and transactions by persons without disposal rights are also dealt with on validity. In enforcement, the Law on Civil Judgment Enforcement 26/2008/QH12 (amended by Law 64/2014/QH13) allows distraint and the handling of transfers made to dissipate assets after a judgment. In bankruptcy, the Law on Rehabilitation and Bankruptcy 142/2025/QH15 lists voidable transactions in the pre-opening period, including gifts and abnormal payments to related persons. Dissipating assets to evade enforcement duties may also attract criminal liability under Articles 379 and 380 of the Penal Code 100/2015/QH13 (amended 2017), depending on the conduct.
Scope of this article and its distinguishing point
This article focuses on the legal lever that pulls transferred assets back into the enforcement pool. The core is distinguishing sham transfers, abnormally low-price transfers and genuine transfers made at a sensitive moment; the conditions for proving an evasion purpose; and the limitation period for voidness claims that creditors so often miss.
Answering each client question
On what ground can a transfer be declared void?
The main ground is a sham transaction under Article 124 of the Civil Code 91/2015/QH13: the transfer is a shell to evade the repayment duty while the debtor in fact still manages and uses the asset. Typical signs: transfers to household relatives, abnormally low prices or no real payment vouchers, timing right after a debt demand or lawsuit, and the debtor still living in the house or using the car as if nothing changed. The more signs converge, the likelier a court declares the transfer void.
What is the limitation period for a voidness claim?
For transactions void as shams, litigation law and the Civil Code 91/2015/QH13 do not impose a limitation period on the request to declare the transaction void in statutory cases such as sham or prohibited transactions, but restitution claims and consequence handling should still be raised as early as possible, before the asset is passed on to another bona fide third party. In bankruptcy, voidable transactions must be brought before the court by the administrator or creditors within the proceedings under the Law on Rehabilitation and Bankruptcy 142/2025/QH15, so early discovery during enforcement is decisive.
How is the evasion purpose proven?
Build a timeline: the debt due date, the demand or lawsuit date, the gift or sale contract date, and the title-transfer registration date. Add evidence that the debtor keeps using the asset, the family relationship between the parties, the price against market value at the transfer date, and money flows showing no real payment or funds circling back to the debtor. For land, the change history at the land registration office provides objective evidence of rapid successive transfers.
Can transferring assets to relatives be a crime?
Possibly, where the conduct fits offences such as failure to execute a judgment or violations in compensation and support under an enforcement decision in the Penal Code 100/2015/QH13, or fraud and abuse of trust depending on the method. A criminal denunciation, however, does not replace the civil voidness claim: the two tracks should run in parallel — civil to pull assets back, criminal to create pressure and sanction the conduct — but denunciation must not be used as an extra-legal debt-collection weapon.
What the business should do next
Practical steps: extract the change history of every suspect asset the moment signs appear; together with the debt lawsuit, ask the court for interim measures freezing assets still in the debtor’s name and barring transfer of the assets whose validity is disputed; build the timeline and a market-price file as the backbone of the sham proof; and consider a selective criminal denunciation once there are enough signs, after the civil track has been locked down.
This article has been quality-reviewed by the FLAW AI Legal Council