Vt. Stat. Ann. tit. 11, § 4074 (2026)

Subchapter 005 : TRANSFEREES AND CREDITORS OF MEMBER

• § 4074. Charging order

  (a)(1) On application by a judgment creditor of a member or transferee, a court may enter a charging order against the distributional interest of the judgment debtor for the unsatisfied amount of the judgment.

  (2) Except as provided in subsection (f) of this section, a charging order constitutes a lien on a judgment debtor’s distributional interest and requires the limited liability company to pay over to the person to which the charging order was issued any distribution that would otherwise be paid to the judgment debtor.

  (b) To the extent necessary to effectuate the collection of distributions pursuant to a charging order in effect under subsection (a) of this section, the court may:

  (1) appoint a receiver of the distributions subject to the charging order, with the power to make all inquiries the judgment debtor might have made; and

  (2) make all other orders necessary to give effect to the charging order.

  (c)(1) Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, the court may foreclose the lien and order the sale of the distributional interest.

  (2) Except as provided in subsection (f) of this section, the purchaser at the foreclosure sale obtains only the distributional interest, does not thereby become a member, and is subject to section 4073 of this title.

  (d) At any time before foreclosure under subsection (c) of this section, the member or transferee whose distributional 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.

  (e) At any time before foreclosure under subsection (c) of this section, a limited liability company or one or more members whose distributional 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.

  (f) This section does not deprive any member or transferee of the benefit of any exemption laws applicable to the member’s or transferee’s distributional interest.

  (g) If a court orders foreclosure of a charging order lien against the sole member of a limited liability company:

  (1) the court shall confirm the sale;

  (2) the purchaser at the sale obtains the member’s entire interest, not only the member’s transferable interest;

  (3) the purchaser thereby becomes a member; and

  (4) the person whose interest was subject to the foreclosed charging order is dissociated as a member.

  (h) This section provides the exclusive remedy by which a person, who in the capacity of a judgment creditor seeks to enforce a judgment against a member or transferee, may satisfy the judgment from the judgment debtor’s distributional interest. (Added 2015, No. 17, § 2.)