16-16-605 - Charging orders for judgment creditor of member or transferee.
16-16-605. Charging orders for judgment creditor of member or transferee.
(1) On application by a judgment creditor of a member or transferee, a court may enter acharging order against the financial rights of the judgment debtor for the unsatisfied amount ofthe judgment. A charging order issued under this Subsection (1) constitutes a lien on thejudgment debtor's financial rights and requires the limited cooperative association to pay over tothe creditor or receiver, to the extent necessary to satisfy the judgment, any distribution thatwould otherwise be paid to the judgment debtor.
(2) To the extent necessary to effectuate the collection of distributions pursuant to acharging order under Subsection (1), the court may:
(a) appoint a receiver of the share of the distributions due or to become due to thejudgment debtor under the judgment debtor's financial rights, with the power to make allinquiries the judgment debtor might have made; and
(b) make all other orders that the circumstances of the case may require to give effect tothe charging order.
(3) Upon a showing that distributions under a charging order will not pay the judgmentdebt within a reasonable time, the court may foreclose the lien and order the sale of the financialrights. The purchaser at the foreclosure sale obtains only the financial rights that are subject tothe charging order, does not thereby become a member, and is subject to Section 16-16-603.
(4) At any time before a sale pursuant to a foreclosure, a member or transferee whosefinancial rights are subject to a charging order under Subsection (1) may extinguish the chargingorder by satisfying the judgment and filing a certified copy of the satisfaction with the court thatissued the charging order.
(5) At any time before sale pursuant to a foreclosure, the limited cooperative associationor one or more members whose financial rights are not subject to the charging order may pay tothe judgment creditor the full amount due under the judgment and succeed to the rights of thejudgment creditor, including the charging order. Unless the organic rules otherwise provide, theassociation may act under this Subsection (5) only with the consent of all members whosefinancial rights are not subject to the charging order.
(6) This chapter does not deprive any member or transferee of the benefit of anyexemption laws applicable to the member's or transferee's financial rights.
(7) This section provides the exclusive remedy by which a judgment creditor of amember or transferee may satisfy the judgment from the member's or transferee's financial rights.
Enacted by Chapter 363, 2008 General Session