Employment Law Questions? Ask an Employment Lawyer.
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Ok, you have two different issues here. Even without a written contract, you can sue him for the owed funds. That's one issue. You can show the work done and sue for "unjust enrichment."However, the right to sue runs directly into the second issue here, bankruptcy. Your debt is unsecured, so you'll be at the end of the line. In fact, without a judgment, you really aren't even at the end of the line yet. Regrettably, there isn't anything that you can do to stop that. Business debt is a legal debt to put through bankruptcy and that is a statutory right, to file it. All you can really do is go ahead and file a suit to get a judgment so that, if he comes into money or there is some left at the end, you at least get some of that.
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Not really. The unsecured debt has to put their claim in and the court handles who gets paid what. If the court sees funds going to one debtor under unsecured, the court can actually pull those funds back for dispersal.
I'm not a bankruptcy attorney, though I have done a few, so I can't get great into detail in that issue. I'm an employment law attorney that can address the fact that you are legally owed the money and can obtain a judgement. It's just a matter of determining how much that is actually worth to you. We have this happen often, unfortunately, where a claimant has a strong claim but the defendant is judgement proof because they have no assets or are about to be cleared through a bankruptcy.