Bankruptcy Law

Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.

Ask a Lawyer, Get an Answer ASAP!

Questions about Bankruptcy and Wages

Bankruptcy can have a large effect on a person’s finances and financial future. An individual needs to make sure he/she knows how bankruptcy may affect his finances, assets and various sources of income before he/she files for bankruptcy. Not knowing how bankruptcy may affect an individual’s wages can lead to the individual making hasty decisions about filing for a bankruptcy. Given below are popular questions about bankruptcy and wages asked by individuals.

For How Long Should an Individual Have to Work to Show Employment/Wages Before He/She Files for Bankruptcy?

There may be no time limit for an individual to be getting a salary before he/she can file for bankruptcy.

Would Unpaid Wages be Considered as Secured Debt in a Bankruptcy?

Unpaid wages may not be considered secured debt in a bankruptcy case even if the employee has a written contract guarantying him/her the salary. It may however, be given a priority status.

If a Company Files for Chapter 11 Bankruptcy, would a Judge Pay the Salaries of the Employees Before or After the Bankruptcy Filing Date?

The pre and post bankruptcy petition salaries may be handled differently by the bankruptcy court when a company files for Chapter 11 Bankruptcy. The salaries to be paid after the bankruptcy petition is filed may be given priority and paid before any claims for wages that were to be paid before the bankruptcy petition was filed. The pre petition salaries may also be considered to be priority claims but may be paid after the post bankruptcy petition salaries are paid off to the employees.

Where should an Individual Mention Accrued Wages on a Schedule B of a Bankruptcy Petition?

When filing for bankruptcy an individual may mention accrued and unpaid wages under point 18 of Schedule B under “other liquidated debts owed to debtor including tax refunds”

Can the Wages of the Head of a Household be Garnished for Debt Collection?

Wage garnishment rules may differ from state to state in the US. In some states like Florida, the wages of the head of the household may be exempt from any creditor claims. However, if the wages of the head of the household is above $500 a week, then they may be garnished for debt collection if the debtor agrees to it in writing.

Can an Individual be Forced to Work Without Wages if a Company Files for Chapter 11 Bankruptcy?

An individual may not be forced to work without wages if his/her company files for a chapter 11 bankruptcy. Asking an individual to work without wages may be considered an involuntary servitude.

Can an Individual File for a Chapter 7 Bankruptcy if his/her Wages are more than the Salary Requirements for a Chapter 7 Bankruptcy?

An individual may not be able to file for Chapter 7 Bankruptcy if his/her wages are more than the salary requirements for a chapter 7. There may be no exceptions to this rule. However, the individual may file for a Chapter 13 Bankruptcy and work out a repayment plan.

Would an Increased Income affect an Individual’s Projected Disposable Income in a Chapter 13 Bankruptcy?

According to the bankruptcy code, when an individual files for a Chapter 13 Bankruptcy, he/she may have to contribute the projected disposable income to the bankruptcy plan for the first 36 months of the plan. However, if the individual’s income changes during the first three months of the payment plan, he/she may not have to make changes to the disposable income. After the first three years of the repayment plan, the individual may not have to contribute any disposable income to the plan according to the bankruptcy code. If there is an increase in the individual’s expenses along with the change in salary, the bankruptcy trustee may not make any changes to the individual’s disposable income or the repayment plan.

Reading up about the effects of bankruptcy on wages will help individuals understand if filing for bankruptcy will affect all of their wages or not. Having more information about bankruptcy and wages can help individuals know where they stand and what steps they may need to take if their company files for a bankruptcy. If you are not sure of the impact of either your or your employer’s bankruptcy on your income, it’s always advisable to ask an Expert.
Please type your question in the field below

3 verified Bankruptcy Lawyers are online now

Bankruptcy Lawyers on JustAnswer are verified through an extensive 8-step process including screening of licenses, certifications, education and/or employment. Learn more

Online
Terry L.

Attorney

Doctoral Degree

★★★★★
2670 positive reviews
Online
cortrightlaw

Attorney

Doctoral Degree

★★★★★
511 positive reviews
Online
JoeLawyer

Attorney

Juris Doctorate

★★★★★
376 positive reviews
See all Bankruptcy Lawyers
JustAnswer in the news:
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
Web sites like justanswer.com/legal
...leave nothing to chance.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.