Bankruptcy and Employment Law Claims | Employment Laws
Read out a few questions and answer on the Bankruptcy and Employment Law Claims and how you can seek out a lawyer for your case.
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Los Angeles Office
21052 Oxnard Street Woodland Hills,Los Angeles, CA 91367
818-835-5735
Orange County Office
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714-450-6591
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Bankruptcy and Employment Law Claims

Bankruptcy and Employment Law Claims

written by Joseph Lovretovich.

I JUST LOST MY JOB, CAN I FILE BANKRUPTCY?

It is not uncommon in these times for people to be in severe financial distress to contemplate filing bankruptcy. While that is certainly an option, there are steps you must take to protect your right to sue your employer.

When you file bankruptcy, you must list not only your debts but also any claims you have. This includes money owed to you; claims for personal injuries if you were in an accident; and most importantly any claims you may have against your former employer. This would include claims such as wrongful termination, sexual harassment, failure to pay proper wages and overtime and all types of discrimination. When you see a bankruptcy lawyer you must tell him that you suspect such claims to make sure they are in included in the discharge of your bankruptcy.

WHAT HAPPENS WHEN I LIST MY EMPLOYMENT-RELATED CLAIMS?

When you list your claims the trustee has two options. First he can take over the claim and try to collect damages to pay to your creditors. Second, he can abandon the claim feeling that it is too speculative to warrant pursuing it. When that happens you are free to bring your own claim and keep the money collected.

In reality, most trustees do not have the time; or the expertise to properly evaluate these types of cases and will many times just abandon them. Then the case returns to you and you can sue your employer and keep the money you win.

WHAT IF I DON’T INCLUDE MY CLAIMS IN MY BANKRUPTCY?

If you don’t list your claim you cannot sue your employer unless you reopen your bankruptcy and amend your asset list and include it. Then you must hope that the trustee looks at and abandons the claim back to you.

WHAT PROBLEMS DO I FACE IF I REOPEN MY BANKRUPTCY?

First, you will have to pay your bankruptcy attorney to reopen your case.

Second, you have now flagged your case to the trustee that maybe you have a valuable claim since you are taking the time and spending the money to list that claim. The trustee is paid by a percentage of what he collects for the creditors. He may now be interested whereas at the beginning of your bankruptcy he probably would not be so interested. He will contact your employment attorney to try to value the claim.

I AM NOT AN EXPERT, WHAT IF I DIDN’T REALIZE I HAD A CASE WHEN I FILED BANKRUPTCY?

Your actual knowledge in most instances are not considered in determining whether you had a case. Many times, clients are very stressed and upset when they get fired. They don’t always focus on their rights against their employer. Unfortunately, that is not the test to determine whether it is included in the bankruptcy estate. The test is whether the claim actually existed at that time.

WHAT HAPPENS IF THE TRUSTEE TAKES OVER MY CLAIM?

The trustee will control your case. He will retain your attorney and the attorney will answer to him, not you. The trustee does not have your best interests at heart. His goal will be to make your creditors whole. So assume that your creditors are owed $50,000. The trustee will only care enough to collect that amount of money and if your case is worth substantially more than that, he will not care.

HOW CAN AN EMPLOYMENT LAWYER HELP ME WHEN I AM CONTEMPLATING BANKRUPTCY?

Our firm will offer a free consultation to anyone who thinks he or she might have an employment claim. We can advise the client on how to describe the claim for his or her bankruptcy petition in a way that doesn’t make the trustee think the claim is valuable.

Secondly, if you failed to list the claim, we again will consult with your bankruptcy attorney to describe the amended claim in the same way. Sometimes, we can help you convince the bankruptcy attorney to reduce his fee to reopen if he should have considered including it when filing bankruptcy petition.

Third, if the trustee is insistent in taking over and pursuing your claim, we can usually negotiate on your behalf, so that a split is agreed to so that you can get a percentage of whatever the trustee successfully collects even if it isn’t enough to pay off all of your creditors. After all, why would you put out the effort to sue an employer if you had no financial stake in the outcome?

CONCLUSION

The most important thing you should take away from this article is that whenever you have been fired or have suffered conduct that you feel is inappropriate in the workplace, seek out a lawyer. Our firm like most other employment law firms will give you a free consultation to help you decide whether you have a case. If we agree that you have a case, we understand that you probably don’t have any money to pursue your case. We will represent you on a contingency fee so that you don’t have any out-of-pocket expenses to bring your lawsuit.

Speak To Our Firm About Your Case

Our law firm accepts cases on referral from other lawyers throughout California. To schedule a free initial consultation, call our office at 818-835-5735 or send us an email.

Los Angeles Office

21052 Oxnard Street
Woodland Hills, Los Angeles, CA 91367
Phone: 818-835-5735
Fax: 818-610-3030

Orange County Office

2400 E. Katella Avenue Suite 440
Anaheim, CA 92806
Phone: 714-450-6591
Fax: 714-456-9179

Bay Area Office

369 Pine Street,
Suite 506
San Francisco, CA 94104
Phone: 415-906-3343