Chap. 323.—An ACT to authorize, under certain conditions and under the direc-
tion and control of certain courts, assignments by certain persons of salary,
wages and income to trustees for the benefit of creditors; defining the power
and duties of such trustees and fixing their compensation; and prescribing the
effect of such assignments as to creditors of the parties so assigning.

[S B 238]
Approved March 27, 1936

1. Be it enacted by the General Assembly of Virginia, as follows:

Section 1. Assignment of Salary, Wages and Income for Benefit of
Creditors—Whenever any trial justice, civil and police justice, civil
justice, judge of the Juvenile and Domestic Relations Court, or judge
of a court of record, is of the opinion that any debtor desires to
honestly pay his just debts, and can do so with the cooperation of his
creditors, and such debtor is willing to assign his salary, wages or
income to a trustee for the benefit of his creditors, subject to the super-
vision and orders of the court, the said trial justice, civil and police
justice, civil justice, judge of the Juvenile and Domestic Relations
Court, or judge of a court of record, may, on the written assignment,
under oath, of the salary, wages or income of such debtor, setting forth
the names of his creditors and the amount due each one, and upon
filing the same with the court, together with the written consent of a
majority of his creditors in number and in amount, appoint some re-
sponsible person, firm or corporation, willing to accept such appoint-
ment, as trustee to receive the salary, wages or income of such debtor
and pay off the obligations due by him as hereinafter provided. Where
the debtor is employed on a salary or for wages, the written consent
of his employer shall be necessary.

Section 2. Trustee; Rights and Duties ; Compensation.—The trustee
shall make written reports to the court at such times as said court may
direct, for which services the trustee may charge as compensation five
per centum of such wages, salary or income received and disbursed by
him, provided, however, that no public officer or employee who receives
a full time salary and who acts as trustee under this section shall retain
said fee for his personal use.
The trustee, upon being appointed, shall give written notice to any
person, firm or corporation who may be at the time, or may thereafter
become indebted to said debtor, and upon receiving such notice such
person, firm or corporation shall pay to the trustee any salary, wages
or income that may be owing to such debtor, as and when the same
is due.

The Trustee shall have the right to compromise and settle any
claims against the debtor which in his discretion shall be for the benefit
of all the creditors.

Section 3. Debts; Order of Payment.—The trustee shall immediately
upon receipt of such salary, wages or income, or at such other time as
the court may direct, disburse said fund as follows:

(a) Pay to the debtor direct, or for his benefit as the court may
direct, any amount he may be entitled to as is exempted by law if he is
a householder and head of a family, or, if he is not a householder or
head of a family, then such amount for the necessities of life as may
be agreed upon by the creditors in said assignment. But nothing in
this section shall prevent the trustee from paying to said debtor a greater
amount than is exempt by law if agreed to by the creditors and ap-
proved by the court.

(b) The trustee shall next pay, according to such funds as he has
in his possession, a pro rata share of the balance to all the creditors
on an equal basis, or, in such proportions as the creditors may agree.

Section 4. Exemption From Garnishment; Levy or Distress.—
When the assignment is executed, approved by the court, and the trustee
has been appointed and notice given to the creditors mentioned in the
assignment, such assignment shall be deemed legal and binding upon
all creditors, and such salary, wages or income shall be exempt from
garnishment, levy or distrees, during such time as the assignment is in
existence, and such assignment shall have priority over all liens sub-
sequently obtained.

Section 5. Court; Duties and Powers.—The court may, at any
time, upon complaint that the terms of the assignment are not being
fairly observed, order the debtor and trustee to appear before the
court at such time as it may designate, and the court may, if the evi-
dence justifies, or in its discretion may declare the assignment null and
void. When such action is taken by said court a written notice shall
be sent forthwith to all persons named in the assignment.

The court may on its own motion revoke said assignment whenever
it feels that the ends of justice are not being attained. The trustee may
resign at any time after accounting for all funds in his possession, and
the court may appoint another trustee.

When the assignment has been fully complied with, the court shall
discharge said trustee and notify the employer of said debtor, if there
is one, that the debtor is from thenceforth entitled to receive his entire
salary, wages or income direct.

Section 6. Clerk of Court; Duties; Fees.—The clerk of the court
wherein any assignment is filed shall carefully preserve the same, to-
gether with all reports of the trustees, and shall keep an index of all
such assignments. For filing said assignment a fee of fifty cents shall
be charged. For any notice to be mailed by the court a fee of ten cents
shall be charged. For any notice required to be served by an officer, a
fee of fifty cents shall be charged by said officer.