My employment contract has a severance clause for termination without cause. Does the apply in bankruptcy court?

UPDATED: May 13, 2009

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: May 13, 2009Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

My employment contract has a severance clause for termination without cause. Does the apply in bankruptcy court?

I submitted a claim for my severance based upon my original employment contract. Will the California court make the debtor honor my contract if my termination was caused by bankruptcy? Also, cause was defined as fraud, felony, etc….not bankruptcy.

Asked on May 13, 2009 under Bankruptcy Law, California


R.C., Member, Connecticut Bar / FreeAdvice Contributing Attorney

Answered 13 years ago | Contributor

A contract is a contract and it usually (though not always) is followed to the letter.  Unless your contract has a clause stating that you can be terminated without severance, for filing for or being granted bankruptcy, you cannot be denied your severance. On the other hand, is your ex-employer is complaining to the police that you committed fraud, felony, etc.?  Did you do anything that could be construed as fraud, felony, etc.?  If not, your employer is committing the fraud by falsifying your termination form , and you should consult a criminal attorney right away.  Otherwise, these criminal claims, which are not confidential, are going to follow you into your job search for a new job, and perhaps elsewhere.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption