Employee payroll is considered unsecured debt in a bankruptcy

In a bankruptcy secured debt (mortgages, pension fund, Eddie’s loans, bonds) get paid first. Then unsecured debt (employee payroll, and other creditors) get paid. Employees are treated like any other creditors in a bankruptcy. Good news is employees are typically the first unsecured debt that gets paid, bad news is if there is no money after paying the secured debt you won’t get paid.

So there you have it, Eddie’s made sure he gets paid first then associates will get paid. If there was ever any don’t who he was looking out for know you know

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Thanks for the link.... for those who have a 401k you might want to roll over to your own IRA as soon as possible, although it may be a little late if they file BK this weekend.... what happens if Sears doesn't deposit deductions from your pay into your 401k account? (I know they don't match)... I copied this from the link.... (I recently rolled over my Sears 401k and left the plan because of that concern).

read the following

"401(k) plan assets are also held and administered separate and apart from the employer’s

assets and may not be used to pay the employer’s creditors. However, the employee will need

to file a proof of claim or take other steps if the employer has failed to pay to the 401(k) plan

the employee’s and/or the employer’s share of any contributions due."

Hey it’s friday and you got paid right?? Relax and Don’t believe the hype!

I worked for an organization that was in Chapter 11 BK. Paychecks came late in the day and direct deposits were sent in after the cut-off, so some banks would hold those funds til Monday. However, we always did get paid. BK courts prioritize payroll expenses, because if your business isn't viable, a reorg just won't fly.

The best way to get a paycheck for sure is to just move on from SHC. Good luck to everyone.

Be prepared, here is a good read to know what you can expect as an employee of a company filing either chapter 11 or 7

https://www.citybarjusticecenter.org/wp-content/uploads/2016/11/Bankruptcy-Basics-A-Guide-for-Employees_2016.pdf

Thread regarding Sears layoffs

Employee payroll is considered unsecured debt in a bankruptcy

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