Creditor's Bills And Charging Orders

Creditor's bills are an underused, but effective method, of recovering on judgments. A creditor's bill allows a judgment creditor to reach equitable assets which, by reason of encumbrances thereon or uncertainties respecting title or valuation, cannot be effectively subjected to the ordinary legal process of execution by way of judgment liens, attachment or garnishment.

In Ohio, creditor's bill actions are governed by R.C. § 2333.01. In order for a creditor to bring a creditor's bill action, the judgment debtor must have insufficient real or personal property subject to levy or execution to satisfy the judgment. When filing a creditor's bill, it is important that the creditor demonstrate sufficient evidence showing that a judgment debtor has insufficient real or personal property to satisfy the judgment.

Charging Orders

Much like creditor's bills, charging orders are also an effective, but often underutilized, method of collecting upon a judgment. A charging order is a court order obtained by a judgment creditor of a partner in a partnership which charges the judgment debtor partner's partnership interest with payment of the unsatisfied amount of the judgment.

In Ohio, a charging order may be brought against partners in a general partnership, as well as partners in a limited partnership. A charging order charges a partner's interest in the partnership pursuant to R.C. § 1775.27. A partner's interest is described as the partner's share of the profits or surplus in a partnership. It is important to recognize that a charging order has no effect on the property rights of the other partners in a partnership, just against the partner who owes a debt.