Arizona Charging Order Statutes And Opinions

State StateArizona

Arizona Charging Order

GENERAL PARTNERSHIPS: A.R.S. § 29-1044. Partner's transferable interest subject to charging order
LIMITED PARTNERSHIPS: A.R.S. § 29-3503. Charging order
LIMITED LIABILITY COMPANIES: A.R.S. § 29-655. Rights of judgment creditors of a member; A.R.S. § 29-732.01. Ownership of interest in limited liability company in joint tenancy or community property with right of survivorship

GENERAL PARTNERSHIPS

A.R.S. § 29-1044. Partner's transferable interest subject to charging order

A. On application by a judgment creditor of a partner or of a partner's transferee, a court having jurisdiction may charge the transferable interest of the judgment debtor to satisfy the judgment. The court may appoint a receiver of the share of the distributions due or to become due to the judgment debtor in respect of the partnership and may make all other orders, directions, accounts and inquiries the judgment debtor might have made or that the circumstances of the case may require.

B. A charging order constitutes a lien on the judgment debtor's transferable interest in the partnership. The court may order a foreclosure of the interest subject to the charging order at any time. The purchaser at the foreclosure sale has the rights of a transferee.

C. At any time before foreclosure, an interest charged may be redeemed either:

1. By the judgment debtor.

2. With property other than partnership property, by one or more of the other partners.

3. With partnership property, by one or more of the other partners with the consent of all of the partners whose interests are not so charged.

D. This chapter does not deprive a partner of a right under exemption laws with respect to the partner's interest in the partnership.

E. This section provides the exclusive remedy by which a judgment creditor of a partner or partner's transferee may satisfy a judgment out of the judgment debtor's transferable interest in the partnership.

LIMITED PARTNERSHIPS

A.R.S. § 29-3503. Charging order

A. On application by a judgment creditor of a member or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment. A charging order requires the limited liability company to pay over to the person to which the charging order was issued any distribution that otherwise would be paid to the judgment debtor.

B. The member or transferee whose transferable interest is subject to a charging order under subsection A of this section may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order.

C. A limited liability company or one or more members whose transferable interests are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and thereby succeed to the rights of the judgment creditor, including the charging order.

D. This chapter does not deprive any member or transferee of the benefit of any exemption law applicable to the transferable interest of the member or transferee.

E. This section provides the exclusive remedy by which a person seeking in the capacity of judgment creditor to enforce a judgment against a member or transferee may satisfy the judgment from the judgment debtor's transferable interest.

LIMITED LIABILITY COMPANIES

A.R.S. § 29-655. Rights of judgment creditors of a member

A. On application to a court of competent jurisdiction by any judgment creditor of a member, the court may charge the member's interest in the limited liability company with payment of the unsatisfied amount of the judgment plus interest. To the extent so charged, the judgment creditor has only the rights of an assignee of the member's interest.

B. This chapter1 does not deprive any member of the benefit of any exemption laws applicable to his interest in the limited liability company.

C. This section provides the exclusive remedy by which a judgment creditor of a member may satisfy a judgment out of the judgment debtor's interest in the limited liability company.

A.R.S. § 29-732.01. Ownership of interest in limited liability company in joint tenancy or community property with right of survivorship * * *

I. With respect to an interest in a limited liability company owned in joint tenancy with right of survivorship, tenancy in common or community property with or without right of survivorship, if a charging order from a court of competent jurisdiction is obtained against a co-owner's share of the interest, it shall attach only to that co-owner's share or portion of the interest and not to the share or portion of the other co-owner or co-owners.

Arizona Charging Order Statutes And Opinions