If my employer closed the business and filed bankruptcy while still owing me a months worth of wages, how do I get him to pay my owed wages?

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If my employer closed the business and filed bankruptcy while still owing me a months worth of wages, how do I get him to pay my owed wages?

I’m owed $2,000.

Asked on February 6, 2012 under Employment Labor Law, Minnesota

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If the employer was an LLC or corporation, you would have no recourse--you would only be able to proceed against the company for the money it owes you, but if the company is closed down, there is either no money and/or no company any more. Also, if it was the company that filed for bankruptcy, debts to employees may be discharged in bankruptcy, so that would be another impediment to collecting.

If the business was a sole proprietorship, you may sue the owner personally. However, if he filed for a personal bankruptcy, again, that may end up discharging the debt to you. You should put in a claim for the money, into the bankruptcy process, but it is very likely that you would--after months or years--only get pennies or dimes on the dollar for what you are owed (if even that; sometimes, creditors get nothing).

Unfortunately, you describe a situation in which it is very difficult to collect.


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