However, an inference of actual intent to hinder, delay, or defraud may be drawn from the defendant's actions. In re Rubin, 12 B.R. 436 (Bankr.S.D.N.Y. 1981); In re Bone, 7 B.R. 549 (Bankr.M.D.Ga. 1980). See also Rothschild v. Lincoln Rochester Trust Company, 212 F.2d 584 (2d Cir. 1954); In re Woods, 71 F.2d 270 (2d Cir. 1934).
As stated in White, supra, the Code presumes that creditors know the law and assume the risk that debtors may invest their assets in exempt property. While recognizing this rule, the courts have developed a limitation relating to the conversion of property from non-exempt to exempt status — if the evidence presented reveals an intent to hinder, delay, or defraud creditors, the transfer of nonexempt to exempt property should be rescinded. An inference of actual intent to hinder, delay or defraud may be drawn from the debtors actions. See In re Rubin, 12 B.R. 436 (Bankr.S.D.N.Y. 1981); In re Bone, 7 B.R. 549 (Bankr.M.D.Ga. 1980). Thus, the courts may look at both the actions taken and their timing to determine whether an allowable transfer occurred.
See, e.g., State Bank of Albany v. Martinez, 31 B.R. 299, 301 (Bankr.D.Vt. 1983); In re Fragetti, 24 B.R. 392, 296 (Bankr.S.D.N.Y. 1982); Johnston Memorial Hospital v. Hess, 21 B.R. 465, 467 (Bankr.W.D.Va. 1982); Semmerling Fence Supply, Inc. v. Ramos, 8 B.R. 490, 496 (Bankr.W.D.Wis. 1981). However, actual intent may be inferred from the debtor's actions.Daniels v. Keenan, 19 B.R. 724, 725, 731 (Bankr.W.D.Mo. 1982); Lewis v. Bone, 7 B.R. 549, 551 (Bankr.M.D.Ga. 1980). Intent is rightfully inferred if the transfer is surrounded by badges or indicia of misconduct. O'Connor v. O'Connor, 32 B.R. at 628; Aetna Insurance Co. v. Nazarian, 18 B.R. 143, 150 (Bankr.D.Md. 1982); Nakagawa v. Sergio, Inc., 16 B.R. 898, 908 (Bankr.D.Hawaii 1981); Loeber v. Loeber, 12 B.R. 669, 675 (Bankr.D.N.J. 1981).
New York, 1981). In re Bone, 7 B.R. 549 (Bkrtcy. Georgia, 1980). Also see Rothschild v. Lincoln Rochester Trust Company, 212 F.2d 584 (C.A.2d 1954). In re Woods, 71 F.2d 270 (C.A.2d 1934).
An inference of actual intent to defraud creditors may be drawn from the extrinsic evidence of the debtor's actions. This inference is compelling and inescapable and precludes any conclusion other than one of actual intent to defraud. See In re Bone, 7 B.R. 549, 551 (Bankr.Ct.M.D.Ga. 1980). "The law forbids all efforts to put property beyond the reach of creditors, no matter what its value; so long as courts are tolerant of such conduct, men will engage in it and the purposes of the bankruptcy act will be balked."