Assignment of all debtor's property in trust for creditors; fraudulent and void assignments; trustees

Sec. 1. (a) A debtor who is in embarrassed or failing circumstances may make a general assignment of all the debtor's property in trust for the benefit of all the debtor's bona fide creditors. (b) Except as provided in this chapter, an assignment described in subsection (a) that is made after March 19, 1859, is considered fraudulent and void. (c) A debtor who is: (1) in embarrassed or failing circumstances; and (2) making a general assignment of all the debtor's property as provided in this chapter; may select the debtor's trustee. The trustee shall serve and qualify, unless creditors representing an amount of at least one-half (1/2) of the liabilities of the debtor petition the court for the removal of the trustee and the appointment of another trustee. If the petition is filed, the judge of the circuit or superior court in which the debtor resides shall immediately remove the trustee and appoint a suitable disinterested party to act as trustee in place of the removed trustee. (d) This chapter may not be construed to prevent a debtor from preferring a particular creditor by an assignment not made under this chapter that: (1) conveys less than all of the debtor's property; (2) is made for the benefit of less than all of the debtor's creditors; or (3) is made by other means; if the action is taken in good faith and not as a part of, or in connection with, a general assignment made under this chapter. However, a corporation may not prefer any creditor if a director of the corporation is a surety on the indebtedness preferred or has been a surety on the indebtedness within four (4) months before the preference.