In partnership law, how must a creditor typically proceed to collect from a partner's interest under the exhaustion rule?

• A. Directly seize the partner's personal wages.
• B. Pursue partnership assets before attacking the partner's personal assets.
• C. Seize both partner and partnership assets without any order.
• D. Ignore the exhaustion rule when collecting.

Answer: (B)

Exhaustion rule in partnership law means a creditor must first apply to the partnership’s assets before reaching the partner’s personal assets. When collecting from a partner’s interest, the typical path is to pursue the partnership’s assets—often by obtaining a charging order on the partner’s interest that directs distributions to help satisfy the debt. The partnership continues operating, and distributions to the partner can be redirected to creditor funds as those partnership assets are exhausted. Only after the partnership assets are exhausted may the creditor seek to tap the partner’s personal assets, subject to proper procedures and protections. Directly seizing the partner’s wages or attempting to seize both partnership and personal assets without following that sequence would circumvent this rule, and ignoring the exhaustion rule altogether would undermine the established framework.