If you’re being sued or have a court order against you, report all your assets truthfully and repay as much as you can — don’t transfer your house or money to relatives, friends, or companies.

20. If you’re being sued or have a court order against you, report all your assets truthfully and repay as much as you can — don’t transfer your house or money to relatives, friends, or companies.

Cost: There is no cost involved. Simply report your assets as required by the court: list everything you currently own and everything you acquired in the year prior to receiving the enforcement notice. Pay off whatever debts you can. If you can’t pay in full, negotiate a settlement or installment plan with the creditor.

In plain terms: Putting your house in a company’s name or transferring money to relatives or friends isn’t some clever “workaround” — it falls squarely under the circumstances described in the law on refusal to execute court orders. Conviction for this offense carries a sentence of up to three years; in especially serious cases, the sentence is three to seven years. Relatives, friends, or companies that help hide or transfer assets are treated as accomplices, and those assets must be recovered. Failing to report assets or providing false information can result in fines of up to 100000 yuan and up to 15 days of detention. However, if you truly have no money, this crime does not apply.

Benefit: Asset transfers aren’t merely “workarounds” — they themselves constitute criminal acts. The Standing Committee of the National People’s Congress has issued an interpretation of Article 313 of the Criminal Law, explicitly stating that “hiding, transferring, deliberately destroying, or transferring assets for free or at an unreasonably low price, thereby preventing the execution of a judgment or order” qualifies as “having the ability to execute but refusing to do so under serious circumstances.” In other words, hiding money, transferring it away, deliberately destroying one’s own property, giving it away for free, or selling it at a steep discount all render a court order meaningless. In 2024, the Supreme People’s Court and the Supreme People’s Procuratorate added ten more scenarios to this definition, including using fake settlements or transfers to dispose of assets, as well as buying someone else’s property at an unreasonably high price to guarantee their debts. All these actions are deliberate attempts to strip oneself of assets available for debt repayment. The maximum sentence for this crime remains three years; in especially serious cases, it rises to three to seven years plus a fine. Such serious circumstances include using fake lawsuits, arbitration, or notarization to obstruct enforcement, gathering crowds to storm enforcement sites, attacking or detaining enforcement officers, or causing a creditor to commit suicide or self-harm due to non-payment. Even outsiders who aren’t parties to the case may be deemed accomplices if they knowingly help hide or transfer assets. Illegally transferred assets must be recovered or returned. Transfers made after receiving a summons but before a judgment takes effect also count. On the civil side, creditors may petition the court to annul any transfers made for free or at unreasonably low prices. Failure to report assets or providing false information may result in fines up to 100000 yuan and detention of up to 15 days (as stipulated in the 2024 interpretation effective December of that year).

Evidence grade: A

Sources: Standing Committee of the National People's Congress (2002). Interpretation of Article 313 of the "Criminal Law of the People's Republic of China". <https://www.gov.cn/gongbao/content/2002/content_61738.htm>; Supreme People's Court of China, Supreme People's Procuratorate of China (2024). Regarding the handling of refusal to execute judgments, Interpretation of Several Issues on the Applicable Law in the Judgment of Criminal Cases (Fa Interpretation [2024] No. 13, Articles 3, 4, 5, 6, 8, 11, and 12). The release page of the Supreme People’s Court, the full text is reproduced from Guangzhou Prison, Guangdong Province. <https://www.court.gov.cn/fabu/xiangqing/447931.html>, <http://gzjy.gd.gov.cn/zxxx/content/post_4608108.html>; Standing Committee of the National People's Congress (2015). Criminal Law Amendment (9) (Article 39, amends Article 313 of the Criminal Law). <https://www.spp.gov.cn/spp/fl/201802/t20180205_364562.shtml>; National People's Congress (2020). Civil Code (Articles 538, 539, 540). <https://www.spp.gov.cn/spp/fl/202006/t20200602_463888.shtml>; National People's Congress Standing Committee (2023 revision). Civil Procedure Law (Articles 114, 118, 252). Reprinted by Guizhou Provincial Market Supervision Bureau: <https://amr.guizhou.gov.cn/zwgk/xxgkml/jcxxgk/zcfg/fl/202401/t20240129_83645867.html>

Notes: The commonly shared advice online — such as “put your house in a company’s name to use as employee housing” or “transfer all your money to relatives” — isn’t a loophole; it’s precisely the kind of conduct singled out in judicial interpretations. Relatives, friends, or companies aiding such actions are treated as accomplices, and any assets involved must be recovered. Conversely, if you truly have no money, this crime does not apply. To determine whether you “have the ability to repay but refuse to do so,” necessary living expenses for you and your dependents must first be deducted. If you repay part or all of the debt before prosecution and your circumstances are relatively minor, prosecution may be waived. Repaying the debt prior to a first-instance judgment may also lead to a lighter sentence or even exemption from punishment. For guidance on what to do after being placed on a blacklist or having spending restrictions imposed, see item 21; instructions on how to regain good standing after fulfilling obligations are provided in Section 7, item 19.