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Roger, Attorney
Category: Bankruptcy Law
Satisfied Customers: 31789
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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Does a severance agreement qualify for a post petition debt

Resolved Question:

Does a severance agreement qualify for a post petition debt and will the agreement be honored should a company file for bankruptcy?
Submitted: 8 years ago.
Category: Bankruptcy Law
Expert:  Roger replied 8 years ago.

If the employer files chapter 11 or 13, you should still get your severance package without any trouble because each of these types of bankruptcies are reorganizations of debt, not liquidation.


However, if chapter 7 is filed, which is a complete liquidation, you may not get your full severance package, or even a package at all. You will have a priority claim for any unpaid wages, but future income, such as a severance package, would probably be lost.

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