§ 29–1006.05. Charging order.

(a) On application by a judgment creditor of a member or transferee, a court may enter a charging order against the financial rights of the judgment debtor for the unsatisfied amount of the judgment. Except as otherwise provided in subsection (b) of this section, a charging order constitutes a lien on the judgment debtor’s financial rights and require the limited cooperative association to pay over to the person to whom the charging order was issued any distribution that would otherwise be paid to the judgment debtor.

(b) To the extent necessary to effectuate the collection of distributions pursuant to a charging order under subsection (a) of this section, the court may:

(1) Appoint a receiver of the distributions subject to the charging order with the power to make all inquiries the judgment debtor might have made; and

(2) Make all other orders necessary to give effect to the charging order.

(c) Upon a showing that distributions under a charging order will not pay the judgment debt within a reasonable time, the court may foreclose the lien and order the sale of the financial rights. Except as otherwise provided in subsection (f) of this section, the purchaser at the foreclosure sale shall obtain only the financial rights that are subject to the charging order, shall not thereby become a member, and shall be subject to § 29-1006.03.

(d) At any time before a foreclosure under subsection (c) of this section, a member or transferee whose financial rights are subject to a charging order under subsection (a) of this subsection may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order.

(e) At any time before foreclosure under subsection (c) of this section, the limited cooperative association or one or more members whose financial rights are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and thereby succeed to the rights of the judgment creditor, including the charging order.

(f) If a court forecloses a charging order lien against the sole member of a limited cooperative association:

(1) The court shall confirm the sale;

(2) The purchaser at the sale obtains the member’s entire interest, not only the member’s financial rights;

(3) The purchaser thereby becomes a member; and

(4) The person whose interest was subject to the foreclosed charging order is dissociated as a member.

(g) This chapter shall not deprive any member or transferee of the benefit of any exemption laws applicable to the member’s or transferee’s financial rights.

(h) This section provides the exclusive remedy by which a person seeking to enforce a judgment against a member or transferee, in the capacity of judgment creditor, may satisfy the judgment from the member’s or transferee’s financial rights.