Failure to either negotiate to manage debts or pay debts would typically result in the a lawsuit from the creditor from whom the funds were sourced and the likely outcome will be a court judgment in the creditor’s favor. Armed with the judgment, the creditor will move to attach the assets and take possession.
When you transfer your assets in such a manner or time as to be deemed to constitute hindering or delaying or defrauding your creditors, the courts will simply unwind that transfer.
The best approach is typically to have an asset protection plan designed and executed well in advance of any such attack by creditors as this will contain any action they take against them. Taking action after the fact will only raise flags and likely result in the transfer being unwound thus nullifying your efforts.
Where assets that are the subject of contention in instances of divorce, bankruptcies or debt collection are hidden by financial transactions, the courts may apply Badges of Fraud and in fraudulent transfers, these include:
Frustrating Your Creditor
If you have a proper and professionally organized asset protection plan in place, well ahead of time, your creditor will certainly be frustrated and limited to getting a charging order against interest accruable to you but even that is very risky for the creditor so they usually do not bother.
Protection after defaulting
By waiting till the default to the creditors occurs, you stand the risk of limiting your options seriously but then case law indicates that there are situations and conditions under which your assets may still be protected.