Encumbrances of Partnership Interests

Question 1

Charging Order

Answer 1

A judgment creditor can subject a partner’s transferable interest to a charging order.

Question 2

When a Charging Order Is Granted (Receivership)

Answer 2

If a court charges a debtor partner’s transferable interest to satisfy the judgment, it may then appoint a receiver of his share of the distributions due him from the partnership.

Question 3

Redemption

Answer 3

Before foreclosure or sale of debtor’s interest, the other partners may redeem his interest with their separate property, or, with the consent of all other partners, with partnership property.

Question 4

Personal Liability of Debtor/Partner

Answer 4

Ordinarily, a claimant may not take action against a partner’s personal assets unless the partnership assets fail to satisfy the claimant’s judgment.