Strong Arm Powers

The right of a debtor to avoid unperfected liens and other transfers through the Code-created mechanism of allowing the debtor to assume the status of a hypothetical lien creditor or bona fide purchaser of real estate. The strong arm powers are also frequently employed to avoid unperfected security interests and unrecorded real estate liens. The strong arm powers allow the debtor to avoid transfers by using state fraudulent transfer statutes that usually have longer look-back periods than the two year Code provision.

Bankruptcy Code ยง 544. See also Bona Fide Purchaser, Fraudulent Transfer, Hypothetical Lien Creditor, Perfected.

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