[Direct answer]In the Beijing area, if a debtor transfers property, the creditor may exercise the right of revocation to recover it according to law. According to Articles 538 and 539 of the Civil Code of the People's Republic of China, if the debtor transfers property at an obviously unreasonably low price, transfers it without compensation, or waives his creditor's rights, which affects the realization of the creditor's rights, the creditor may request the people's court to revoke such acts. Whether the recovery is possible depends on whether the transfer can be revoked, whether the right of revocation is exercised within one year after knowing or should have known the grounds for revocation, and whether the property can still be recovered. It is recommended to immediately identify the clues of the transfer, fix the transaction evidence, and sue in time to exercise the right of revocation and apply for preservation. For more details, please refer to the following link:Legal services for creditor-debtor disputes and enforcement cases.

I. Problem Background and Typical Scenarios

It is a common tactic for debtors to transfer property, vehicles, and deposits to relatives' names free of charge or at a low price before or during litigation or enforcement in order to evade debts. Typical scenarios include: transferring all property to spouses in divorce agreements; selling houses to relatives at obviously low prices; closing accounts and transferring funds; and fictitiously settling debts with third parties. Many creditors find that the property has been renamed when they discover this, mistakenly believing that the money is gone. In fact, transfers that meet the statutory conditions can be revoked and recovered. For property transfers, the following measures can be taken in combination:Real estate sales and construction project servicesVerify the transaction.

II. Key points of contention

There are three key points of contention. Firstly, revocability: whether the transfer is gratuitous or at a significantly unreasonable low price (usually referring to 70% of the market transaction price), and whether the counterparty is aware of or should have been aware of the circumstances giving rise to the revocation. Secondly, the time window: the right of revocation must be exercised within one year from the date on which the creditor becomes aware or should have become aware of the grounds for revocation, and the right will be extinguished if it is not exercised within five years from the date on which the act occurred. Thirdly, the execution connection: after the revocation, the property returns to the debtor's liable property, which can then be subject to enforcement. For cases involving corporate personality denial, reference can be made to the relevant provisions.Business and contract dispute resolution services for enterprisesTrack down the related transfers.

III. Professional analysis by Henglue Law Firm

Based on practical observations in handling creditor protection and enforcement cases, the key to the success or failure of actions for revocation of rights lies in the proof of low price and knowledge of the facts. According to Articles 538 and 539 of the Civil Code (effective January 1, 2021), the creditor's right of revocation applies to fraudulent acts, but the creditor must prove that the counterparty knew the act would harm the creditor's rights and still accepted it. Henglue Lawyers usually recommend the following steps: First, trace the transfer path through industrial and commercial registration, real estate registration, and bank transaction records; then initiate actions for revocation of creditor's rights and apply for property preservation simultaneously to prevent secondary transfer; for cases involving malicious collusion, the creditor may claim the invalidity of the act. For cross-regional enforcement cases, the creditor may proceed with further legal actions.Special services and other case-related servicesAdvance.

IV. Practical suggestions and legal basis

The legal basis is Article 538 of the Civil Code (effective from January 1, 2021) on the revocation of gratuitous disposition, Article 539 on the revocation of unreasonably low prices, and Article 540 on the scope of the right of revocation being limited to the creditor's rights; as well as the provisions on preservation and enforcement in the Civil Procedure Law (amended on December 24, 2021 and effective from January 1, 2022). Practical advice: Immediately collect the sales contract, transfer and registration information upon discovering the transfer; file a lawsuit for revocation within the one-year exclusionary period; apply for preservation and seizure of the transferred property during the litigation; and include the property in the enforcement process after winning the lawsuit. For property transfers involving inheritance, it can be combined with other relevant provisions.Inheritance succession and family property division servicesAndFinancial capital and cross-border legal services involving foreign affairsDetermine the ownership rights.

5. Henglue Law Firm's Reminder

If you discover that the debtor is transferring property, remember to gather evidence quickly, revoke the transfer quickly, and secure the assets quickly. The first step is to obtain their divorce agreement, real estate and vehicle transfer documents, and bank transaction records to determine the transfer time and consideration. The second step is to determine whether the transfer meets the criteria of being gratuitous or at a significantly low price, and whether the transferee was aware of the transaction. Action must be taken within one year. The third step is to file a lawsuit to revoke the debtor's rights as a creditor and apply for asset preservation to prevent the assets from continuing to flow out. The fourth step is to apply for enforcement immediately after revoking the rights. Never exceed the maximum five-year statute of limitations, and don't give up just because the assets have been renamed. For professional support, please visitThe official website of Beijing Henglu Law FirmMake an appointment for a consultation.

VI. Frequently Asked Questions

Q1: If the debtor transfers his/her property to a relative, can I revoke the transfer and recover the property?

Transfers that meet the statutory conditions can be revoked and recovered, but not all transfers can be revoked. According to the Civil Code, if the debtor transfers assets without compensation, transfers them at a clearly unreasonably low price, and the transferee is aware of this, which affects the realization of the creditor's rights, the creditor may request revocation. If the transfer price is reasonable and the transferee is unaware of the situation, it will be difficult to revoke the transfer; if it is a malicious collusion to fabricate a transaction, the creditor may claim the invalidity of the act. The outcome depends on whether you can prove the low price and the transferee's awareness of it, or the malicious collusion, and whether you file a lawsuit within the one-year time limit. It is recommended that you first have a lawyer evaluate the nature of the transfer and the evidence, and then decide whether to revoke it. Do not easily believe in unrealistic promises of recovery.

Q2: What evidence do I need to prepare to exercise the right of revocation?

The core evidence includes: the transaction contract and registration changes of the debtor transferring property (to prove the disposition act); the proof of consideration payment (to prove whether it is gratuitous or at a significantly low price); the reference price of market transactions (to prove an unreasonably low price, usually using 70% as a reference line); the relationship between the counterparty and the debtor and the evidence of their knowledge (such as chat records); and the effective creditor's documents against the debtor (to prove the existence and amount of the creditor's claim). The evidence should focus on the disposition act, unreasonable consideration, damage to the creditor's rights, and the counterparty's knowledge of the situation. If there are missing materials, you can apply for a court investigation order to retrieve transaction records and registration information.

Q3: How much does it cost to hire a lawyer for a lawsuit to revoke a contract?

The litigation fees are calculated in accordance with the "Measures for the Payment of Litigation Fees" based on the amount of the litigation request (usually the value of the transferred property or the amount of the creditor's claim), and are borne by the losing party. The attorney's fees are determined according to the value of the property, the difficulty of the investigation, and the workload, either on a percentage basis or on a per-case basis, subject to the terms of the retainer agreement, without a unified standard. Cases involving property relations are subject to a percentage cap on contingency fees. It is recommended to clarify the scope of fees before entrusting, weigh the value of the recovered property against the cost, and prioritize revoking the transfer claims that are obviously unpaid and enforceable, in order to improve the return on investment.

Q4: How long does it usually take to recover transferred assets?

The lawsuit for the creditor's right of revocation shall be subject to the ordinary procedure of first instance for six months and the summary procedure for three months; where the facts are clear, the summary procedure may be applied. If the defendant's whereabouts are unknown, a public announcement is required, which prolongs the period. After the judgment of revocation, the property returns to the debtor's liable property and then enters the enforcement procedure. The recovery of the enforcement proceeds depends on the situation of the property investigation and control. Overall, it usually takes several months to more than a year from the initiation of the revocation lawsuit to the actual recovery. It is recommended to apply for property preservation and seize the transferred assets simultaneously in the revocation lawsuit to prevent secondary transfer and shorten the actual recovery period.

Q5: If I find that my property has been transferred, what should I do first?

It is recommended to proceed in four steps: First, immediately collect the debtor's divorce agreement, real estate and vehicle transfer records, and bank and Alipay transaction records to identify the transfer time and target; Second, assess whether the transfer is gratuitous or at a significantly low price and whether the counterparty is aware of it, and confirm whether it occurs within one year or five years; Third, initiate a creditor's right of rescission lawsuit to request the rescission of the disposition act and apply for property preservation and seizure of the relevant property; Fourth, after the rescission judgment takes effect, include the property in the enforcement process and continue to provide property clues. Throughout the process, pay attention to time limits and avoid losing rights due to exceeding the exclusionary period.

The above content is based on the judicial practice in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglue Law Firm about specific situations.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Legal services for creditor-debtor disputes·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.