What can a creditor actually reach if they sue you personally?

Your ownership interest in the company, in most cases. What they can do with it varies considerably by state.

People often understand that an LLC protects personal assets from business creditors. Fewer understand the reverse question.

The charging order

The usual remedy is a charging order — a court directs that distributions otherwise payable to you go to the creditor instead. The creditor doesn't become a member and generally can't vote or force the company to distribute.

In some states that's the exclusive remedy. In others, particularly for single-member LLCs, courts have gone further and allowed foreclosure on the interest itself, which can mean losing the company.

Why single-member LLCs are treated differently

Charging order protection exists partly to protect other members from being forced into business with a creditor. With one member, there's nobody else to protect, and several courts have found the rationale doesn't apply.

If you're a sole owner relying on charging order protection, verify how your state actually handles it.

What it doesn't protect against at all

Your personal guarantees. Your own conduct. Fraudulent transfers — moving assets once a claim exists or is foreseeable is a well-developed area of law, and courts unwind those transfers.

On timing

Structure done well before any claim exists is planning. The same structure done after is a transfer a court will examine, and the outcome is usually worse than doing nothing.

What actually protects you

Adequate insurance, in most cases, handles far more than any entity structure. Then clean separation between entities. Then not personally guaranteeing more than you have to.

What to do

Check how your state treats charging orders, particularly for single-member LLCs. Check your insurance limits. And if you're considering restructuring because of a claim that already exists, get advice first — that's a different situation with different rules.

This is general information, not legal advice for your situation. If you want an answer for your business, book a consultation.