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In a settlement agreement can you specify that you must be paid (can't go away through a bankruptcy)?

Orlando, FL |

This is for an unpaid overtime matter.

Attorney Answers 3

  1. No. There are only two ways to ensure payment after discharge in bankruptcy: by bringing an adversary proceeding during the bankruptcy and obtaining a declaration either that the debt is non-dischargeable or that the debtor is not entitled to a discharge at all, or by executing and filing with the court a reaffirmation agreement. A pre-bankruptcy agreement not to discharge a particular debt is not enforceable. There are roughly 18 reasons why a debt might be non-dischargeable, and they are enumerated in section 523(a) of the Code. Interpreting any part of the very complex Bankruptcy Code is not a job for a lay person. If there is a substantial amount of money at stake here, you would be foolish not to discuss this matter with a skilled bankruptcy lawyer.

  2. To add to what Mr. Oney said, unpaid wages are a priority claim, so in the event there are funds to be distributed, your claim would move toward the front of the line, ahead of general unsecured creditors.

  3. Bankruptcy protection is a constitutional right and you can't contract it away. But, as other counsel pointed out even if a debtor files for bankruptcy protection certain debts are treated as non-dischargeable and/or priority debts and as such receive special treatment in bankruptcy.

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