What is a charging order?

A charging order is a court order in Washington that assigns a lien to a business or asset owned by a debtor. The lien is then standing between the debtor and the creditor so that when the asset is sold or when the debtor earns money from the asset, it is paid to the creditor instead of the debtor. This ensures that creditors are paid the money they are owed, even if the debtor attempts to avoid doing so. A charging order is a powerful tool for creditors, since the order is binding and cannot be altered or cancelled without court approval. The order can also be extended to multiple assets owned by the debtor, so if one asset is sold for a lesser amount, the creditor can still get the total amount they are owed from the other assets. Additionally, charging orders are harder to challenge legally than other means of asset protection. This means that creditors can often secure the debt they are owed in a fraction of the time and pain it would otherwise take. Finally, charging orders are usually issued on a case-by-case basis, so courts will often assess each situation before deciding if a charging order is appropriate or necessary. This means that creditors must provide extensive evidence of their right to be paid, which helps ensure that creditors are not abusing this power.

Related FAQs

How does a charging order work?
Are there any state or federal laws that protect assets from creditors?
What are the costs associated with establishing an offshore trust?
What is the difference between asset protection and estate planning?
What types of assets can be protected by asset protection law?
What is an offshore asset protection trust?
What are the legal requirements for an asset protection trust?
What is the best jurisdiction for an asset protection trust?
Is it legal to use asset protection strategies?
What is the statute of limitations on asset protection planning?

What is a charging order?

Related FAQs

Related Blog Posts