Ala. Code § 8-9B-1 Short Title.
8-9B-1. Short Title.
This chapter may be cited as the Alabama Uniform Voidable Transactions Act.
(Act 2018-163, §1.)
Alabama Uniform Voidable Transactions Act
Ala. Code tit. 8, ch. 9B
in effectAla. Code § 8-9B-2 Definitions.
8-9B-2. Definitions.
As used in this chapter:
(1) “Affiliate” means:
(i) a person that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than a person that holds the securities:
(A) as a fiduciary or agent without sole discretionary power to vote the securities; or
(B) solely to secure a debt, if the person has not in fact exercised the power to vote;
(ii) a corporation 20 percent or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held, with power to vote, by the debtor or a person that directly or indirectly owns, controls, or holds, with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than a person that holds the securities:
(A) as a fiduciary or agent without sole discretionary power to vote the securities; or
(B) solely to secure a debt, if the person has not in fact exercised the power to vote;
(iii) a person whose business is operated by the debtor under a lease or other agreement, or a person substantially all of whose assets are controlled by the debtor; or
(iv) a person that operates the debtor’s business under a lease or other agreement or controls substantially all of the debtor’s assets.
(2) “Asset” means property of a debtor, but the term does not include:
(i) property to the extent it is encumbered by a valid lien;
(ii) property to the extent it is generally exempt under nonbankruptcy law; or
(iii) an interest in property held in tenancy in common for life with cross contingent remainder to the survivor in fee to the extent it is not subject to process by a creditor holding a claim against only one tenant.
(3) “Claim,” except as used in “claim for relief,” means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured and specifically shall include the nonpayment of child support pursuant to a court order.
(4) “Creditor” means a person that has a claim.
(5) “Debt” means liability on a claim.
(6) “Debtor” means a person that is liable on a claim.
(7) “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.
(8) “Insider” includes:
(i) if the debtor is an individual:
(A) a relative of the debtor or of a general partner of the debtor;
(B) a partnership in which the debtor is a general partner;
(C) a general partner in a partnership described in clause (B); or
(D) a corporation of which the debtor is a director, officer, or person in control;
(ii) if the debtor is a corporation:
(A) a director of the debtor;
(B) an officer of the debtor;
(C) a person in control of the debtor;
(D) a partnership in which the debtor is a general partner;
(E) a general partner in a partnership described in clause (D); or
(F) a relative of a general partner, director, officer, or person in control of the debtor;
(iii) if the debtor is a partnership:
(A) a general partner in the debtor;
(B) a relative of a general partner in, a general partner of, or a person in control of the debtor;
(C) another partnership in which the debtor is a general partner;
(D) a general partner in a partnership described in clause (C); or
(E) a person in control of the debtor;
(iv) an affiliate, or an insider of an affiliate as if the affiliate were the debtor; and
(v) a managing agent of the debtor.
(9) “Lien” means a charge against or an interest in property to secure payment of a debt or performance of an obligation, and includes a security interest created by agreement, a judicial lien obtained by legal or equitable process or proceedings, a common-law lien, or a statutory lien.
(10) “Organization” means a person other than an individual.
(11) “Person” means an individual, estate, partnership, association, trust, business or nonprofit entity, public corporation, government or governmental subdivision, agency, or instrumentality, or other legal or commercial entity.
(12) “Property” means both real and personal property, whether tangible or intangible, and any interest in property whether legal or equitable and includes anything that may be the subject of ownership.
(13) “Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.
(14) “Relative” means an individual related by consanguinity within the third degree as determined by the common law, a spouse, or an individual related to a spouse within the third degree as so determined, and includes an individual in an adoptive relationship within the third degree.
(15) “Sign” means, with present intent to authenticate or adopt a record:
(i) to execute or adopt a tangible symbol; or
(ii) to attach to or logically associate with the record an electronic symbol, sound, or process.
(16) “Transfer” means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, license, and creation of a lien or other encumbrance. The term also includes a transfer made pursuant to a settlement whether or not incorporated into a court order.
(17) “Valid lien” means a lien that is effective against the holder of a judicial lien subsequently obtained by legal or equitable process or proceedings.
(Act 2018-163, §1.)
Ala. Code § 8-9B-3 Insolvency.
8-9B-3. Insolvency.
(a) A debtor is insolvent if the sum of the debtor’s debts at a fair valuation is greater than the sum of the debtor’s assets at a fair valuation.
(b) A debtor that is generally not paying the debtor’s debts as they become due other than as a result of a bona fide dispute is presumed to be insolvent. The presumption imposes on the party against which the presumption is directed the burden of proving that the nonexistence of insolvency is more probable than its existence.
(c) Assets under this section do not include property that has been transferred, concealed, or removed with intent to hinder, delay, or defraud creditors or that has been transferred in a manner making the transfer voidable under this chapter.
(d) Debts under this section do not include an obligation to the extent it is secured by a valid lien on property of the debtor not included as an asset.
(Act 2018-163, §1.)
Ala. Code § 8-9B-4 Value.
8-9B-4. Value.
(a) Value is given for a transfer if, in exchange for the transfer, property is transferred or an antecedent debt is secured or satisfied, but value does not include an unperformed promise made otherwise than in the ordinary course of the promisor’s business to furnish support to the debtor or another person.
(b) For the purposes of Section 8-9B-5 (a)(2) and Section 8-9B-6, a person gives a reasonably equivalent value if the person acquires an interest of the debtor in an asset pursuant to a regularly conducted, noncollusive foreclosure sale or execution of a power of sale for the acquisition or disposition of the interest of the debtor upon default under a mortgage, deed of trust, or security agreement.
(c) A transfer is made for present value if the exchange between the debtor and the transferee is intended by them to be contemporaneous and is in fact substantially contemporaneous.
(Act 2018-163, §1.)
Ala. Code § 8-9B-5 Transfer Voidable as to Present or Future Creditor.
8-9B-5. Transfer Voidable as to Present or Future Creditor.
(a) A transfer made by a debtor is voidable as to a creditor, whether the creditor’s claim arose before or after the transfer was made, if the debtor made the transfer:
(1) with actual intent to hinder, delay, or defraud any creditor of the debtor; or
(2) without receiving a reasonably equivalent value in exchange for the transfer, and the debtor:
(i) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or
(ii) intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor’s ability to pay as they became due.
(b) In determining actual intent under subsection (a)(1), consideration may be given, among other factors, to whether:
(1) the transfer was to an insider;
(2) the debtor retained possession or control of the property transferred after the transfer;
(3) the transfer was concealed or not disclosed;
(4) before the transfer was made, the debtor had been sued or threatened with suit;
(5) the transfer was of substantially all the debtor’s assets;
(6) the debtor absconded;
(7) the debtor removed or concealed assets;
(8) the value of the consideration received by the debtor was not reasonably equivalent to the value of the asset transferred;
(9) the debtor was insolvent or became insolvent shortly after the transfer was made;
(10) the transfer occurred shortly before or shortly after a substantial debt was incurred; and
(11) the debtor transferred the essential assets of the business to a lienor that transferred the assets to an insider of the debtor.
(c) A creditor making a claim for relief under subsection (a) has the burden of proving the elements of the claim for relief by a preponderance of the evidence.
(Act 2018-163, §1.)
Ala. Code § 8-9B-6 Transfer Voidable as to Present Creditor.
8-9B-6. Transfer Voidable as to Present Creditor.
(a) A transfer made by a debtor is voidable as to a creditor whose claim arose before the transfer was made if the debtor made the transfer without the debtor receiving a reasonably equivalent value in exchange for the transfer and the debtor was insolvent at that time or the debtor became insolvent as a result of the transfer.
(b) A transfer made by a debtor is voidable as to a creditor whose claim arose before the transfer was made if the transfer was made to an insider for an antecedent debt, the debtor was insolvent at that time, and the insider had reasonable cause to believe that the debtor was insolvent.
(c) Subject to Section 8-9B-3(b), a creditor making a claim for relief under subsection (a) or (b) has the burden of proving the elements of the claim for relief by a preponderance of the evidence.
(Act 2018-163, §1.)
Ala. Code § 8-9B-7 When Transfer Is Made.
8-9B-7. When Transfer Is Made.
For the purposes of this chapter:
(1) a transfer is made:
(i) with respect to an asset that is real property other than a fixture, but including the interest of a seller or purchaser under a contract for the sale of the asset, when the transfer is so far perfected that a good-faith purchaser of the asset from the debtor against which applicable law permits the transfer to be perfected cannot acquire an interest in the asset that is superior to the interest of the transferee; and
(ii) with respect to an asset that is not real property or that is a fixture, when the transfer is so far perfected that a creditor on a simple contract cannot acquire a judicial lien otherwise than under this chapter that is superior to the interest of the transferee;
(2) if applicable law permits the transfer to be perfected as provided in paragraph (1) and the transfer is not so perfected before the commencement of an action for relief under this chapter, the transfer is deemed made immediately before the commencement of the action;
(3) if applicable law does not permit the transfer to be perfected as provided in paragraph (1), the transfer is made when it becomes effective between the debtor and the transferee; and
(4) except with respect to personal property and fixtures where a lender has perfected its security interest in such property in which event paragraph (1)(i) shall apply, a transfer is not made until the debtor has acquired rights in the asset transferred.
(Act 2018-163, §1.)
Ala. Code § 8-9B-8 Remedies of Creditor.
8-9B-8. Remedies of Creditor.
(a) In an action for relief against a transfer under this chapter, a creditor, subject to the limitations in Section 8-9B-9, may obtain:
(1) avoidance of the transfer to the extent necessary to satisfy the creditor’s claim;
(2) an attachment or other provisional remedy against the asset transferred or other property of the transferee if available under applicable law; and
(3) subject to applicable principles of equity and in accordance with applicable rules of civil procedure:
(i) an injunction against further disposition by the debtor or a transferee, or both, of the asset transferred or of other property;
(ii) appointment of a receiver to take charge of the asset transferred or of other property of the transferee; or
(iii) any other relief the circumstances may require.
(b) If a creditor has obtained a judgment on a claim against the debtor, the creditor, if the court so orders, may levy execution on the asset transferred or its proceeds.
(Act 2018-163, §1.)
Ala. Code § 8-9B-9 Defenses, Liability, and Protection of Transferee.
8-9B-9. Defenses, Liability, and Protection of Transferee.
(a) A transfer is not voidable under Section 8-9B-5(a)(1) against a person that took in good faith and for a reasonably equivalent value given the debtor or against any subsequent transferee that took in good faith.
(b) To the extent a transfer is avoidable in an action by a creditor under Section 8-9B-8(a)(1), the following rules apply:
(1) Except as otherwise provided in this section, the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection (c), or the amount necessary to satisfy the creditor’s claim, whichever is less. The judgment may be entered against:
(i) the first transferee of the asset or the person for whose benefit the transfer was made; or
(ii) any subsequent transferee, other than:
(A) a good-faith transferee that took for value; or
(B) a subsequent transferee of a person described in clause (A).
(2) Recovery pursuant to Section 8-9B-8(a)(1) or (b) of or from the asset transferred or its proceeds, by levy or otherwise, is available only against a person described in paragraph (1)(i) or (ii).
(c) If the judgment under subsection (b) is based upon the value of the asset transferred, the judgment must be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment as the equities may require.
(d) Notwithstanding voidability of a transfer under this chapter, a good-faith transferee is entitled, to the extent of the value given the debtor for the transfer, to:
(1) a lien on or a right to retain an interest in the asset transferred; or
(2) a reduction in the amount of the liability on the judgment.
(e) A transfer is not voidable under Section 8-9B-5(a)(2) or Section 8-9B-6 if the transfer results from:
(1) termination of a lease upon default by the debtor when the termination is pursuant to the lease and applicable law;
(2) enforcement of a security interest in compliance with Article 9 of the Uniform Commercial Code, Article 9A, commencing with Section 7-9A-1, of Title 7, other than acceptance of collateral in full or partial satisfaction of the obligation it secures; or
(3) a regularly conducted, noncollusive foreclosure sale or execution of a power of sale for the acquisition or disposition of the interest of the debtor under a mortgage, deed of trust, or security agreement.
(f) A transfer is not voidable under Section 8-9B-6(b):
(1) to the extent the insider gave new value to or for the benefit of the debtor after the transfer was made, except to the extent the new value was secured by a valid lien;
(2) if made in the ordinary course of business or financial affairs of the debtor and the insider; or
(3) if made pursuant to a good-faith effort to rehabilitate the debtor and the transfer secured present value given for that purpose as well as an antecedent debt of the debtor.
(g) The following rules determine the burden of proving matters referred to in this section:
(1) A party that seeks to invoke subsection (a), (d), (e), or (f) has the burden of proving the applicability of that subsection.
(2) Except as otherwise provided in paragraphs (3) and (4), the creditor has the burden of proving each applicable element of subsection (b) or (c).
(3) The transferee has the burden of proving the applicability to the transferee of subsection (b)(1)(ii)(A) or (B).
(4) A party that seeks adjustment under subsection (c) has the burden of proving the adjustment.
(h) The standard of proof required to establish matters referred to in this section is preponderance of the evidence.
(Act 2018-163, §1.)
Ala. Code § 8-9B-10 Extinguishment of Claim for Relief.
8-9B-10. Extinguishment of Claim for Relief.
A claim for relief with respect to a transfer under this chapter is extinguished unless action is brought:
(a) under Section 8-9B-5(a)(1), within ten years after the transfer of real property was made;
(b) under Section 8-9B-5(a)(1), within six years after the transfer of personal property was made;
(c) under Section 8-9B-5(a)(2) or 8-9B-6(a), within four years after the transfer was made when the action is brought by a creditor whose claim arose before the transfer was made;
(d) under Section 8-9B-5(a)(2), within one year after the transfer was made when the action is brought by a creditor whose claim arose after the transfer was made; or
(e) under Section 8-9B-6(b), within one year after the transfer was made.
(Act 2018-163, §1.)
Ala. Code § 8-9B-11 Governing Law.
8-9B-11. Governing Law.
(a) In this section, the following rules determine a debtor’s location:
(1) A debtor who is an individual is located at the individual’s principal residence.
(2) A debtor that is an organization and has only one place of business is located at its place of business.
(3) A debtor that is an organization and has more than one place of business is located at its chief executive office.
(b) A claim for relief in the nature of a claim for relief under this chapter is governed by the local law of the jurisdiction in which the debtor is located when the transfer is made.
(Act 2018-163, §1.)
Ala. Code § 8-9B-12 Application to Series Organization.
8-9B-12. Application to Series Organization.
(a) In this section:
(1) “Series” means an arrangement, however denominated, created by a series organization that, pursuant to the law under which the series organization is organized, has the characteristics set forth in paragraph (2).
(2) “Series organization” means an organization that, pursuant to the law under which it is organized, has the following characteristics:
(i) The public organic record of the organization provides for creation by the organization of one or more series, however denominated, with respect to specified property of the organization, and for records to be maintained for each series that identify the property of or associated with the series.
(ii) Debt incurred or existing with respect to the activities of, or property of or associated with, a particular series is enforceable against the property of or associated with the series only, and not against the property of or associated with the organization or associated with any other series of the organization.
(iii) Debt incurred or existing with respect to the activities or property of the organization is enforceable against the property of the organization only, and not against the property of or associated with a series of the organization.
(b) A series organization and each series of the organization is a separate person for purposes of this chapter, even if for other purposes a series is not a person separate from the organization or other series of the organization.
(Act 2018-163, §1.)
Ala. Code § 8-9B-13 Supplementary Provisions.
8-9B-13. Supplementary Provisions.
Unless displaced by the provisions of this chapter, the principles of law and equity, including the law merchant and the law relating to principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake, insolvency, or other validating or invalidating cause, supplement its provisions.
(Act 2018-163, §1.)
Ala. Code § 8-9B-14 Uniformity of Application and Construction.
8-9B-14. Uniformity of Application and Construction.
This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.
(Act 2018-163, §1.)
Ala. Code § 8-9B-15 Relation to Electronic Signatures in Global and National Commerce Act.
8-9B-15. Relation to Electronic Signatures in Global and National Commerce Act.
This chapter modifies, limits, or supersedes the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001 et seq., but does not modify, limit, or supersede Section 101(c) of that act, 15 U.S.C. Section 7001(c), or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 U.S.C. Section 7003(b).
(Act 2018-163, §1.)
Ala. Code § 8-9B-16 Application; Conforming Amendments.
8-9B-16. Application; Conforming Amendments.
This chapter applies to transfers made on or after January 1, 2019, and does not apply to a transfer made before January 1, 2019. The Alabama Uniform Fraudulent Transfer Act, Sections 8-9A-1 to 8-9A-12, inclusive, shall apply to transfers made prior to January 1, 2019, and shall not apply to a transfer made on or after January 1, 2019.
(Act 2018-163, §1.)
Source: Alabama Legislature (alison.legislature.state.al.us)URL: https://alison.legislature.state.al.us/code-of-alabamaFetched: 10/20/2026