While there might be other remedies available and ways to attack the individual and LLC here it is under Illinois, some states better than others
The reason a creditor doesn't want a "charging order" is because they only get the right to receive the INCOME from the LLC, however, the LLC owners don't make distributions and the creditor ends up with a K-1 for the profits and zero cash to pay the income tax! S-Corp, a creditor can step into your shoes as the owner of the company.
What Is an LLC?
A hybrid of the "S" Corporation and a partnership, an "LLC" combines the corporate characteristic of limited liability with the tax advantages and flexibility of partnerships.
What Protection Does an LLC Offer?
Being a member of an LLC offers more protection to the members interest, which makes an LLC very attractive. A creditor can only get a charging order against a member of an LLC and cannot go after the LLC's assets directly. They must instead obtain a charging order from a court, which is not a preferred remedy for a creditor.
What Is a Charging Order?
With a charging order, a creditor has the right to receive any distributions in which the owner of the interest is entitled to. A charging order is issued by the court and instructs the manager(s) to give the distributions that the debtor would ordinarily be entitled to to the creditor until the unpaid judgment is satisfied.
Illinois LLC Act
At first glance, the Illinois LLC Act appears to protect the assets of an LLC. Specifically, Section 30-20 provides that a charging order is available to creditors of the members of an LLC. More importantly, 805 ILCS 180/30-20(e) states:
This Section provides the exclusive remedy by which a judgment creditor of a member or a transferee may satisfy a judgment out of the judgment debtor's distributional interest in a limited liability company.
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