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I was pursuing unpaid wages from a previous employer when he…

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I was pursuing unpaid wages...
I was pursuing unpaid wages from a previous employer when he filed Chapter 7. The wages are more than 180 prior to the date of the bankruptcy filing. Is there a way to keep my claim from being discharged?
Submitted: 1 year ago.Category: Bankruptcy Law
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Answered in 19 minutes by:
4/18/2017
Bankruptcy Lawyer: Bill Attorney, Lawyer replied 1 year ago
Bill Attorney
Category: Bankruptcy Law
Satisfied Customers: 2,806
Experience: Attorney
Verified

Dear Customer,

Thank You for posting your question to just answer today. This is attorney Bill offering legal information specific to your concerns.

IS this a chapter 7 or 11 bankruptcy and where is your wage claim filed ?

Bankruptcy law provides a 90 day look back rule allowing employees to claim from any preferential payment made within 90 days prior to the instigation of the bankruptcy proceedings.

"b)Except as provided in subsections (c) and (i) of this section, the trustee may avoid any transfer of an interest of the debtor in property—

(1)

to or for the benefit of a creditor;

(2)

for or on account of an antecedent debt owed by the debtor before such transfer was made;

(3)

made while the debtor was insolvent;

(4)made—(A)

on or within 90 days before the date of the filing of the petition; or

(B)

between ninety days and one year before the date of the filing of the petition, if such creditor at the time of such transfer was an insider; and

(5)that enables such creditor to receive more than such creditor would receive if—(A)

the case were a case under chapter 7 of this title;

(B)

the transfer had not been made; and

(C)

such creditor received payment of such debt to the extent provided by the provisions of this title."

In addition you can lodge proof of your claim with the court and your priority of receiving payment is after the trustee expenses and domestic child support claims:

"4)Fourth, allowed unsecured claims, but only to the extent of $10,000 for each individual or corporation, as the case may be, earned within 180 days before the date of the filing of the petition or the date of the cessation of the debtor’s business, whichever occurs first, for—

(A)

wages, salaries, or commissions, including vacation, severance, and sick leave pay earned by an individual; or

(B)

sales commissions earned by an individual or by a corporation with only 1 employee, acting as an independent contractor in the sale of goods or services for the debtor in the ordinary course of the debtor’s business if, and only if, during the 12 months preceding that date, at least 75 percent of the amount that the individual or corporation earned by acting as an independent contractor in the sale of goods or services was earned from the debtor."

Your claim is processed by the trustee and you can file an objection to the discharge with the trustee or will be paid in accordance with priority.

Please remember to rate positively my response before exiting.

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Attorney Bill

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Customer reply replied 1 year ago
Chapter 7 and the wage claim is more than 90 days from the instigation of the bankruptcy filing. However, I had obtained any attorney to pursue the matter and we had scheduled a deposition at the time of the filing.
Bankruptcy Lawyer: Bill Attorney, Lawyer replied 1 year ago

Unfortunately a debtor's bankruptcy acts as an automatic stay on all other civil proceedings and the case is transferred to the bankruptcy court where you can file proof of your claim.

As I outlined there is generally a good hope of recovery for wages in the system of priority.

Your attorney can file an objection to the discharge of your debt under section 727

"

(a)The court shall grant the debtor a discharge, unless—(1)

the debtor is not an individual;

(2)the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged with custody of property under this title, has transferred, removed, destroyed, mutilated, or concealed, or has permitted to be transferred, removed, destroyed, mutilated, or concealed—(A)

property of the debtor, within one year before the date of the filing of the petition; or

(B)

property of the estate, after the date of the filing of the petition;

(3)

the debtor has concealed, destroyed, mutilated, falsified, or failed to keep or preserve any recorded information, including books, documents, records, and papers, from which the debtor’s financial condition or business transactions might be ascertained, unless such act or failure to act was justified under all of the circumstances of the case;

(4)the debtor knowingly and fraudulently, in or in connection with the case—(A)

made a false oath or account;

(B)

presented or used a false claim;

(C)

gave, offered, received, or attempted to obtain money, property, or advantage, or a promise of money, property, or advantage, for acting or forbearing to act; or

(D)

withheld from an officer of the estate entitled to possession under this title, any recorded information, including books, documents, records, and papers, relating to the debtor’s property or financial affairs;

(5)

the debtor has failed to explain satisfactorily, before determination of denial of discharge under this paragraph, any loss of assets or deficiency of assets to meet the debtor’s liabilities;

(6)the debtor has refused, in the case—(A)

to obey any lawful order of the court, other than an order to respond to a material question or to testify;

(B)

on the ground of privilege against self-incrimination, to respond to a material question approved by the court or to testify, after the debtor has been granted immunity with respect to the matter concerning which such privilege was invoked; or

(C)

on a ground other than the properly invoked privilege against self-incrimination, to respond to a material question approved by the court or to testify;

(7)

the debtor has committed any act specified in paragraph (2), (3), (4), (5), or (6) of this subsection, on or within one year before the date of the filing of the petition, or during the case, in connection with another case, under this title or under the Bankruptcy Act, concerning an insider;

(8)

the debtor has been granted a discharge under this section, under section 1141 of this title, or under section 14, 371, or 476 of the Bankruptcy Act, in a case commenced within 8 years before the date of the filing of the petition;

(9)the debtor has been granted a discharge under section 1228 or 1328 of this title, or under section 660 or 661 of the Bankruptcy Act, in a case commenced within six years before the date of the filing of the petition, unless payments under the plan in such case totaled at least—(A)

100 percent of the allowed unsecured claims in such case; or

(B)(i)

70 percent of such claims; and

(ii)

the plan was proposed by the debtor in good faith, and was the debtor’s best effort;

(10)

the court approves a written waiver of discharge executed by the debtor after the order for relief under this chapter;

(11)

after filing the petition, the debtor failed to complete an instructional course concerning personal financial management described in section 111, except that this paragraph shall not apply with respect to a debtor who is a person described in section 109(h)(4) or who resides in a district for which the United States trustee (or the bankruptcy administrator, if any) determines that the approved instructional courses are not adequate to service the additional individuals who would otherwise be required to complete such instructional courses under this section (The United States trustee (or the bankruptcy administrator, if any) who makes a determination described in this paragraph shall review such determination not later than 1 year after the date of such determination, and not less frequently than annually thereafter.); or

(12)the court after notice and a hearing held not more than 10 days before the date of the entry of the order granting the discharge finds that there is reasonable cause to believe that—(A)

section 522(q)(1) may be applicable to the debtor; and

(B)

there is pending any proceeding in which the debtor may be found guilty of a felony of the kind described in section 522(q)(1)(A) or liable for a debt of the kind described in section 522(q)(1)(B).

(b)

Except as provided in section 523 of this title, a discharge under subsection (a) of this section discharges the debtor from all debts that arose before the date of the order for relief under this chapter, and any liability on a claim that is determined under section 502 of this title as if such claim had arisen before the commencement of the case, whether or not a proof of claim based on any such debt or liability is filed under section 501 of this title, and whether or not a claim based on any such debt or liability is allowed under section 502 of this title."

When an objection is sustained you can recover your entire wages.

Please remember to rate positively my response before exiting.

THIS IS HOW I GET A CREDIT FOR MY TIME AND RESPONSE

SO I HOPE YOU RATE 5 STARS TODAY

Thanks

Attorney Bill

Ask Your Own Bankruptcy Law Question
Customer reply replied 1 year ago
I outlined there is generally a good hope of recovery for wages in the system of priority.
- From my understanding, this is only if the wages are due 180 days from the date of the filing?
Your attorney can file an objection to the discharge of your debt under section 727
(a)The court shall grant the debtor a discharge, unless—(1) the debtor is not an individual
- He is filing as dba Smart Buildings, LLC which is the company name. Can I assume this would be an appropriate objection to discharge?(b) Except as provided in section 523 of this title, a discharge under subsection (a) of this section discharges the debtor from all debts that arose before the date of the order for relief under this chapter, and any liability on a claim that is determined under section 502 of this title as if such claim had arisen before the commencement of the case, whether or not a proof of claim based on any such debt or liability is filed under section 501 of this title, and whether or not a claim based on any such debt or liability is allowed under section 502 of this title."
Bankruptcy Lawyer: Bill Attorney, Lawyer replied 1 year ago

The 180 days effect the priority of the debt, you would still file proof of your wage debt with the trustee.

A company is also entitled to file bankruptcy; the effect of filing under chapter 7 is that the Smart Buildings LLC wont receive a discharge and you can sue the owner for unclaimed wages that aren't paid as part of the chapter 7 bankruptcy.

Please remember to rate positively my response before exiting.

THIS IS HOW I GET A CREDIT FOR MY TIME AND RESPONSE

SO I HOPE YOU RATE 5 STARS TODAY

Thanks

Attorney Bill

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