Texas Charging Order
A charging order is what a court issues when someone wins a money judgment against the owner of a Texas LLC personally — not against the company itself — and then tries to collect that judgment out of the owner's stake in the business. Texas Business Organizations Code Section 101.112 gives the judgment creditor exactly one way to reach that stake, and it closes off every more aggressive collection tool the creditor might otherwise use against an owner's other property. The statute runs seven subsections deep, and each one does real work: together they decide how much a lawsuit against an LLC owner can actually cost the owner's business, rather than just the owner personally.
This page walks through Section 101.112 subsection by subsection, because the practical protection it provides depends on details a one-line summary — "Texas LLCs have charging order protection" — leaves out entirely. It covers one specific scenario: a personal creditor of the LLC's owner going after the owner's membership interest. A related but different question — what happens when the LLC itself owes the debt — is answered by a separate liability-shield statute; see our LLC Asset Protection page for that side of it.
Getting a Charging Order — Section 101.112(a)
A charging order is not a form a creditor files or a box a creditor checks — it is relief a court grants, and only after the creditor already holds a judgment. Section 101.112(a) lets a judgment creditor of a member, or of any other owner of a membership interest, apply to a court with jurisdiction, and lets that court charge the membership interest of the judgment debtor to satisfy the judgment. Two details in that sentence matter in practice. First, the creditor needs an actual judgment already in hand — a charging order is a tool for collecting a debt already proven in court, not a way to freeze an LLC owner's stake while a lawsuit is still pending. Second, the statute says the court "may" charge the interest: it is relief a court grants on application, not something that attaches automatically the moment a judgment is entered against a member.
What the Creditor Actually Receives — Section 101.112(b)
Winning a charging order does not make the creditor an owner of anything. Section 101.112(b) is explicit that the judgment creditor has only the right to receive any distribution to which the judgment debtor would otherwise have been entitled in respect of the membership interest. Nothing in that sentence hands the creditor a vote, a right to inspect the company's books, a seat at a members' meeting, or any say at all in how the business is run. The charging order redirects a payment the LLC might make to the debtor-member — it does not convert the creditor into a member, and it does not transfer any of the rights that come with membership.
No Distribution Ordered, No Recovery
Because the right created is a right to a distribution, a charging order is only worth what the LLC actually distributes. Deciding whether to distribute cash is a management decision, not a creditor's, and nothing in Section 101.112 requires the company's managers to distribute anything on a schedule a judgment creditor would prefer. A Texas LLC can hold profits inside the company — to reinvest, to build reserves, to cover a slow season — without that decision being overridden by a co-owner's outside creditor. A creditor holding a charging order is, in effect, standing in line for a payment the company's managers control the timing of, and a company that never distributes leaves that creditor holding a court order with nothing behind it to collect.
A Lien That Cannot Be Foreclosed — Section 101.112(c)
Section 101.112(c) calls the charging order a lien on the judgment debtor's membership interest — and in the same subsection says that lien "may not be foreclosed on under this code or any other law." That second clause is doing the real work. An ordinary lien can usually be foreclosed, meaning the lienholder can eventually force a sale of whatever the lien attaches to and take the proceeds. The statute's own phrase — "this code or any other law" — forecloses that option under any legal theory, not just under the Business Organizations Code itself. A judgment creditor holding a charging order cannot force a sale of the membership interest, cannot force a liquidation of the LLC to cash out the interest, and cannot use the lien as leverage to compel a buyout on the creditor's terms.
The Judgment Creditor's Exclusive Remedy — Section 101.112(d)
Section 101.112(d) ties the subsections before it into a single rule: the entry of a charging order is the exclusive remedy by which a judgment creditor of a member, or of any other owner of a membership interest, may satisfy a judgment out of the judgment debtor's membership interest. "Exclusive" means exactly what it says — a judgment creditor cannot ask a court for some other, more aggressive tool instead: not a forced sale, not a court-ordered dissolution of the LLC to reach its assets through liquidation, not an order requiring the managers to distribute cash on the creditor's timeline. A charging order is the ceiling on what a personal judgment against an LLC owner can extract from that owner's stake in the company, not a floor a creditor gets to build on.
The Company's Own Property Stays Out of It — Section 101.112(f)
A separate protection sits in Section 101.112(f), and it is easy to overlook. A creditor of a member, or of any other owner of a membership interest, does not have the right to obtain possession of, or otherwise exercise legal or equitable remedies with respect to, the property of the limited liability company. That is a different question from what the creditor can do to the membership interest itself: this subsection is about the company's own assets — its bank accounts, its equipment, its receivables, its real estate. A member's personal judgment creditor has no claim on any of it. The company's property belongs to the company, and Section 101.112(f) says so directly rather than leaving it to be inferred from general principles about entity separateness.
Other Exemptions Are Not Lost — Section 101.112(e)
Section 101.112(e) makes clear that none of the above replaces protections a member might already have. The section "may not be construed to deprive a member of a limited liability company or any other owner of a membership interest ... of the benefit of any exemption laws applicable to the membership interest." The charging-order framework is a floor, not a ceiling: if some other Texas exemption statute already protects the interest or a distribution from it, Section 101.112 does not override that protection. See our Texas Exempt Assets page for what Texas otherwise shields from creditors with no entity involved at all.
Single-Member LLCs Get the Same Rule — Section 101.112(g)
A number of other states limit charging-order exclusivity to LLCs with more than one owner, on the theory that the rule exists to protect co-owners from being forced into business with a stranger — and that a single-member LLC has no co-owner left to protect. Texas rejected that limitation outright. Section 101.112(g) states that the section "applies to both single-member limited liability companies and multiple-member limited liability companies," with no separate test and no second owner required. Our Single-Member LLC Asset Protection page covers what that extension means in full, including why other states' more restrictive case law does not carry over to a Texas LLC.
What Section 101.112 Does Not Cover
A charging order answers one question — what a personal creditor of an LLC owner can do to that owner's stake in the company — and it answers it narrowly. It does not erase the underlying debt: a creditor holding a charging order still holds a valid judgment and a real claim on future distributions. It does not touch a separate creditor's claim against the LLC itself for the company's own debts, which is governed by a different rule — Business Organizations Code Section 101.114, which provides that except as a company agreement specifically states otherwise, a member or manager is not liable for a debt, obligation, or liability of the LLC, including one under a judgment, decree, or order of a court. See LLC Asset Protection for that side of the analysis. And Section 101.112 only protects a membership interest that is real: keeping LLC funds in a dedicated account, documenting distributions, and maintaining an operating agreement is not a precondition written into the statute itself, but it is what keeps a court from questioning later whether the interest a creditor is trying to reach was ever genuinely separate from the owner personally. An LLC formed in Texas and run as a real business gets the full exclusivity Section 101.112 provides.