charging ordern.
Reviewed by Owen Hathaway, AttorneyUpdated June 4, 2026A creditor's remedy against an owner's interest in an LLC or partnership: the creditor can intercept distributions but generally can't seize the business or run it.
A charging order is the remedy a personal creditor of an LLC member or partner obtains against that owner's interest. It lets the creditor collect distributions that would otherwise go to the debtor-owner, but it does not give the creditor management rights or the ability to force the business to pay out.
Charging-order protection is a core reason businesses are held in LLCs: it insulates the company and the other owners from one owner's personal creditors. Its strength varies by state and by whether the LLC has one member or several.
Colorado's charging-order provision is at C.R.S. § 7-80-703. Protection is strongest for multi-member LLCs; for single-member LLCs it is weaker (see In re Albright, 291 B.R. 538 (Bankr. D. Colo. 2003)). Wyoming statutorily makes the charging order the exclusive remedy, including for single-member LLCs (Wyo. Stat. Title 17, Ch. 29), which is stronger than Colorado.
Related terms
- limited liability companyA business structure that shields its owners' personal assets from the company's debts and lawsuits, while staying simpler and more flexible to run than a corporation.
- asset protection planningArranging ownership of assets in advance and lawfully so they are harder for future creditors to reach, done before a claim arises rather than after.