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Can't afford to pay workers compensation bill for an old company i no longer run. No money saved and 0 assets unfortunately

Hatfield, PA |

Hi - I'm getting collection calls from a PA collections law firm for 2 unpaid balances related to a State Workers Comp Audit completed in 2008 and 2010 for a balance of ~$35k and ~$8k, respectively. I do not have the financial means to pay for these bills. I wish I could hire a lawyer but I can't afford one. I haven't paid my mortgage for 8+ months and had 2 cars repo'd and i have ~$100k in student loan debt. I know the student loan debt will never be foregiven. I'm turning 60 this week with massive debt problems and little work. My student loans are in forebearance (have 3 yrs left to push it back). What happens if I am unable pay the SWIF bill because of my current financial situation? They're asking for just $36k to settle and want full payment which is impossible . Any advice helpful!

Attorney Answers 4

Posted

If the unpaid balances are for workers' compensation insurance premiums, you first need to determine who is responsible for payment. If the policies were in the name of the business, then your personal assets should be safe so long as you formed the business as an LLC or the like and there is no personal guaranty of payment. If the business has ceased operations you will want to make sure that the business is properly closed with the Dept. of State, otherwise it may be possible to pursue personal assets to satisfy the debt.

If you are personally liable for payment, then bankruptcy is your most likely avenue of relief. Although extremely rare, it may be possible to have the student loan debt discharged through Chapter 7. You should consult with a bankruptcy attorney. Many are willing to initially meet for free.

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Posted

Thanks Brian, this was a very thorough response. I have formed an LLC and I am pretty sure there is no personal guaranty of payment. I'm unsure if the business was properly closed with the Dept of State. I have no assets left in my name so I really have nothing to lose in the event I have to claim bankruptcy. I've lost everything I worked for in the past 40 years unfortunately

Posted

That is a tough pickle. BK will probably clear a lot of it, but under most circumstances, an Uninsured WC claim will follow you as long as a tax debt or student loan. A past insurance premium deficiency is probably dischargeable, but an uninsured claim will clearly not be.

Attorneys are very competitive. Choose the Best Answer so we know who helped you the most.

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Posted

Thanks for the comment. Can you explain the difference between a past insurance premium deficiency versus an uninsured claim and which mine falls under? If I am unable to pay the full amount due to little work and 0 savings, what's the best course of action? I will most likely leave this bill unpaid and just tell the collections woman I have no money to pay

Posted

You should seriously consider talking to a bankruptcy lawyer about what is dischargeable and what is not. The workers comp audit shows money owed for the insurance, not for a claim. The insurance company will have paid any claims by now in most situations. A good Bk lawyer will know what to do next.

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Posted

Hi John - is there a specific type of bankruptcy lawyer I should seek or a will a general bankruptcy lawyer be acceptable? Could you provide me with tips of what makes a bankruptcy lawyer good?

John M Connell

John M Connell

Posted

A general bankruptcy lawyer will be OK but it should be someone who devotes the majority, if not all, of their practice to BK. I would also want someone who has done some business bankruptcy so that some of the questions you have can get answered. Depending on what the corporate structure of your business was and whether you gave a personal guarantee to the work comp insurance co you may need the BK to cover the business also.

Asker

Posted

The company was a very small business structured as a LLC and the workers comp policy was listed under the business name, nothing was listed under my own personal name. I hope during times like these, the LLC will protect me. I am not aware of a personal guarantee to the workers comp insurance nor would I have ever agreed to such provision. For a company that is no longer in operation and can't afford to pay for this outstanding workers comp audit bill, what are estimated costs for filing BK for a small LLC business?

Posted

I also think that you should speak to a bankruptcy attorney about this problem. It is a shame to see you in such a position, and I hope things work out for you.

I will evaluate your case for free. I can also refer you to an attorney to help you if I cannot help you. Joyce J. Sweinberg, Esquire 215-752-3732 www.jjsassoc.net Disclaimer: Please note that this answer does not constitute legal advice. It is merely intended to provide general information to aid the poster in finding answers to the problem posed. This answer does not create an attorney-client relationship. In most cases, it is best to contact an attorney directly to find answers to your problems.

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