A charging order is a court order giving a judgment creditor a lien over distributions an LLC or partnership makes to the debtor member. It is a right to intercept money if and when it flows out. It is not ownership: the creditor gets no voting rights, no management role, no access to the company's assets, and no power to force a distribution or dissolve the entity.
The remedy exists to protect the other members. Partnership law long ago decided that your partner's personal creditor should not be able to seize partnership assets or barge into the business, and LLC statutes inherited the idea. Asset protection planning simply runs the logic deliberately: if the LLC's manager chooses not to distribute, a creditor holding a charging order owns a lien on nothing, and in some US states may even owe tax on income never received.
How much protection this provides depends entirely on the statute. Strong US states (Wyoming, Nevada, Delaware) make the charging order the exclusive remedy even for single-member LLCs. Weak states allow foreclosure on the membership interest or ignore the protection for single-member companies entirely, which is how courts reached the assets in cases like Albright and Olmstead.
Nevis wrote the most creditor-hostile version anywhere: the charging order is the sole remedy against a Nevis LLC member, it expires automatically after three years, it cannot be renewed, and suing requires posting a bond first. That statute is why the Nevis LLC, usually owned by a Cook Islands or Nevis trust with the settlor as manager, appears in most serious offshore structures.
Related terms: fraudulent conveyance, spendthrift trust.