Recent legislation enacted in the state of Nevada makes issuing a charging order the exclusive curative for a creditor of a limited partner and member of a Limited Liability Company (LLC) . Further, the Revised Uniform Limited Partnership Act of 2001, which allows a creditor of a partner to foreclose on the partner’s interest in the partnership, has sparked a debate if it is more or less protective than the 1976 version of RULPA, which doesn’t mention foreclosure.

In an article titled "A Charging Order Is the Exclusive Remedy Against a Partnership Interest: Fact or Fiction", (published recently in the ABA magazine "Probate and Property"), it was noted by a attorney in the state of Nevada that the article was written before the Nevada legislature enacted a law concerning partnership/LLC. He also questioned the conclusion of the author’s of the article regarding the Revised Uniform Limited Partnership Act (RULPA). The authors stated that: "The 2001 version of RULPA is less protective because it explicitly permits the foreclosure of the partnership interest." The attorney argues "No rational person would buy a charged interest...even if he did, the assets are still protected."

In response, a co-author of the article asserted: "It is the permanency of the foreclosure that makes it a more onerous remedy....In a foreclosure situation, the debtor loses forever the partnership interest and all of the future benefit in that interest, even if that benefit greatly exceeds the debt amount. This includes a right to the partner’s pro rata share of the net assets of the partnership at liquidation (Section 702). In addition, upon foreclosure, the partner may lose the managerial rights afforded to him by Section 702 (b) by expulsion as a limited partner by consent of the other partners according to section 601(b)(4).

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