The State of Illinois recently passed a law called the Illinois LLC Act that provides that the charging order is the remedy that creditors need to seek to claim a member’s interest in a LLC to satisfy a judgment. The law states that a charging order is obtainable when creditor serves a citation to discover assets on the debtor. Within the law, this also means that property that is held by third parties can also be obtained, and the creditor can serve the third party to obtain the property. Before the introduction and the passing of this legislation, there was a great deal of confusion on how a creditor was to claim an asset to satisfy a debt. In order to effectively serve a citation, a creditor might want to consider serving a citation on both the member of the LLC and the LLC itself.
See Charles Murdock, Creditors’ Rights Against a Member’s Interest in an LLC, Trusts and Estates: Illinois State Bar Association Newsletter, 5-7, June 2012.
