Smith v. Effective Teleservices, Inc.

The primary question presented in this case is as follows: After a judgment debt- or files a Chapter 727 assignment for the benefit of creditors, may a judgment creditor separately pursue a Chapter 726 claim that the judgment debtor fraudulently transferred assets to a third party before making the Chapter 727 assignment? In *1050these circumstances, we hold that if a Chapter 727 assignee has abandoned or sold and assigned a judgment creditor’s fraudulent transfer claim, the judgment creditor may pursue the Chapter 726 claim. The assignee’s abandonment or sale and assignment of a claim is a…