Charging Order Lien And Priority

Topic Lien_Priority TopicsLien

One of the hottest areas of litigation involving charging orders is that of lien priority, both of charging order liens against other types of liens and competing charging orders. The issue exists, in part, because there is substantial uncertainty regarding the following:

1. How and when is a charging order lien perfected?

2. What is the effect of the perfection of a charging order lien in one state on other states?

3. Where must a charging order be perfected?

The answers to these questions are not found in § 503, and that section should be amended to attempt to address these issues. Merely expanding the Comment will likely not be effective, since lien perfection and priority questions are often determined by other statutes, and the charging order lien perfection and priority fix requires statutory equivalency.


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