Wht to do if I was laid off last year by a corporation that went bankrupt?

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Wht to do if I was laid off last year by a corporation that went bankrupt?

Severance packages were not paid but I was advised that I could file a claim as a debtor in bankruptcy court. I did so and just received an “Offer of Settlement”. The settlement lists a Proposed Unsecured Claim Amount, Proposed Priority Claim Amount and Proposed Administrative Claim Amount. I am supposed to either accept or reject the offer. I know the difference in secured vs. unsecured debts and debtors. I also realize that the Administrative Claim is kept by the debtor to pay their expenses. I want to know what this entire offer means to me. Am I likely to receive the Priority Claim and have the Unsecured portion charged off? If I reject the offer, does the entire claim become unsecured and I’m likely to receive nothing?

Asked on October 1, 2012 under Bankruptcy Law, North Carolina

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Under federal bankruptcy law any unpaid wages and benefits due you as an employee of a company that filed for bankruptcy protection is deemed a priority debt. Your entire claim is unsecured versus secured but is deemed a priority debt that should be paid by the employer debtor.

Whether you accept or reject the entire claim it is unsecured in any event. I suggest that you consult further with a bankruptcy attorney about your matter. My inclination is that you accept the proposal and move on with your life.


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