Bankruptcy Claim against a former Employer for Severance not paid

Asked over 2 years ago - Selma, NC

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?

Attorney answers (1)

  1. 1

    Lawyer agrees

    Answered . The answers to your questions are likely explained in the disclosure statement, and in the settlement proposal, and you should review them again, to see what they say about your chances of being paid.

    Besides the disclaimers, which usually provide a liquidation analysis, which may state that the case may fail if not reorganized, there are some general propositions that should help to explain this. The liquidation analysis should predict what happens if the plan is rejected, and may describe what happens if claims such as yours do not accept the plan.

    In general, administrative claims get paid first, then it is more likely that priority claims get paid in full before unsecured claims. Whether any of these three classes get paid, should be disclosed.

    You may benefit from conferring with an experienced bankruptcy attorney, to review this chapter 11 plan, and your rights.

    General legal advice is offered for educational purposes only. A consultation with a qualified attorney is... more

Related Topics


Employment law governs employee pay, non-discrimination policies, employment classifications, and hiring and firing at the federal, state, and local levels.

Employee wages and severance pay

Severance pay is pay and benefits an employee receives after being terminated from a company. Severance pay typically increases with the length of employment.

Matthew R. Gebhardt

Attorney/Client Agreement

Every undertaking of representation for a criminal case, regardless of complexity or severity of the charge should begin with a written agreement between the client and attorney that spells... more

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.


Ask now

33,110 answers this week

3,678 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

33,110 answers this week

3,678 attorneys answering