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.

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.

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 100,000 yuan and detention of up to 15 days (as stipulated in the 2024 interpretation effective December of that year).

全国人大常委会 (2002). 关于《中华人民共和国刑法》第三百一十三条的解释. https://www.gov.cn/gongbao/content/2002/content_61738.htm；最高人民法院、最高人民检察院 (2024). 关于办理拒不执行判决、裁定刑事案件适用法律若干问题的解释（法释〔2024〕13 号，第三、四、五、六、八、十一、十二条）. 最高法发布页，全文核对自广东省广州监狱转载. https://www.court.gov.cn/fabu/xiangqing/447931.html、http://gzjy.gd.gov.cn/zxxx/content/post_4608108.html；全国人大常委会 (2015). 刑法修正案（九）（第三十九条，修改刑法第三百一十三条）. https://www.spp.gov.cn/spp/fl/201802/t20180205_364562.shtml；全国人大 (2020). 民法典（第五百三十八、五百三十九、五百四十条）. https://www.spp.gov.cn/spp/fl/202006/t20200602_463888.shtml；全国人大常委会 (2023 修正). 民事诉讼法（第一百一十四、一百一十八、二百五十二条）. 贵州省市场监管局转载：https://amr.guizhou.gov.cn/zwgk/xxgkml/jcxxgk/zcfg/fl/202401/t20240129_83645867.html

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.