What is a charging order
A charging order is a court order that requires the LLC to pay any distributions otherwise due to a debtor-member to the creditor instead. The creditor does NOT become a member, cannot vote, cannot force a distribution, and cannot seize the LLC interest. The LLC continues operating; the creditor just waits for distributions.
Why Wyoming is stronger than other states
- Exclusive remedy: charging order is the ONLY option for member creditors (other states allow foreclosure or other remedies)
- Single-member protection: Wyoming caselaw explicitly upholds single-member LLC protection (Florida Olmstead case eroded single-member protection there)
- Privacy combined with protection: creditor cannot easily identify the LLC owner from public filings
- Limits LLC interest sale: creditor cannot force sale of the LLC interest
- No foreclosure: creditor cannot foreclose on LLC interest
Maintaining asset protection
- Use third-party registered agent (not your home address)
- Separate LLC bank account (no commingling with personal funds)
- Document corporate formalities (operating agreement, member resolutions)
- Operating agreement explicitly invokes Section 17-29-503
- Make distinct decisions for LLC vs personal
- Avoid alter ego doctrine (do not treat the LLC as your personal piggy bank)
- Insurance for catastrophic events (umbrella policy, professional liability)