Company went bankrupt, can I get my security deposit?

by **clem84** » Mon Dec 12, 2011 4:01 pm

I have worked for a company for 6 year, my first 2 weeks of employment were taken away as a security deposit, I have quit my job, and now the boss of the company said he is not going to pay me my security deposit back. Its been 6 weeks since i have quite my job.

he said he will file for bankruptcy and wont have to pay any money back (he owes me 10k) and another 3 employees, So to avoid paying all of us the money we earned (more then 30k) he wants to file for bankruptcy and cheat his way out, as of right now he opened a new business.

I know that under the law he was supposed to have a trust account and never touch that money until I quite, I know that for a fact that he was using my money for the past 6 years, and he did not have a trust account, I think its called breach of trust.

If he filed for bankruptcy, do I have a chance to win in court and get my money?

by **albanwr26** » Mon Dec 12, 2011 4:31 pm

You cannot go bankrupt to avoid paying employee wages or benefits, but you'd have to sue to collect if he tries.

I have never heard of an employee paying a 'security deposit' Are you sure you don't mean a delayed pay, with a 2 week hold back? If that is the case, he simply owes that pay as usual.

by **jocheved** » Mon Dec 12, 2011 4:36 pm

My guess is that, legally, the bankruptcy does not affect your right to those funds. Never heard of a security deposit for employment, but I doubt that an employee would qualify as a creditor - and bankruptcy limits the rights of creditors.

This whole thing sounds off. Did he already file for bankruptcy? If he did and he is a small business owner, I can't imagine he would be able to land credit to open a new business. I wonder if he is simply lying to you in an effort to make you think that any attempts to collect your "deposit" are futile?

by **ned** » Mon Dec 12, 2011 4:43 pm

If a debtor goes bankrupt and there are no assets to pay claims, the creditors get zero in most cases. Is your employer a sole proprietorship or a corporation? If your employer is an individual, you may be able to get the debt classified as nonchargeable which would make it survive bankruptcy. You should contact your state labor department and/or a real attorney for assistance.

by **syvwkh** » Mon Dec 12, 2011 4:45 pm

if they declared ch.13 or 11 nope

by **edmondo93** » Mon Dec 12, 2011 4:50 pm

Bankruptcy means that the person has no money. You can file a claim as a debtor, but you will have to get in a long line and probably won't get anything.

by **leonie36** » Mon Dec 12, 2011 4:56 pm

If he has confessed to filing for bankruptcy to avoid paying what he owed you and was supposed to be holding the money in a trust account, you will be able to get at it, you just might need an attorney to do so.

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