§ 8.01-525.1.Recordation; notice of sale; preferences prohibited.

A deed of assignment for the benefit of creditors is a debtor’s voluntary alternative to bankruptcy, handing property over to a trustee who liquidates it and distributes proceeds to creditors. Section 8.01-525.1 opens Chapter 18.1’s rules for that process with two basic guarantees: public notice and fair treatment among creditors.

First, the deed itself must be recorded, so anyone checking land or judgment records can see the assignment happened. Second, before the trustee sells anything under the deed, unless notice of the sale already went out earlier, every creditor named in the deed gets certified mail, return receipt requested, at least ten days ahead of time, spelling out that a sale is happening, when and where, on what terms, and whether accepting under the deed counts as full satisfaction of the creditor’s claim.

On fairness, the statute draws a firm line: no creditor can be given preferential treatment in the deed itself. The only exceptions are creditors who already have a lien or preference under some other law, or who already hold a valid lien on the property being assigned, and even they get priority only up to the value of what their lien covers, not a blanket preference over the whole estate.