
{"id":5229,"date":"2014-09-15T00:00:00","date_gmt":"2014-09-15T04:00:00","guid":{"rendered":"https:\/\/dev-ginsberg-gingras.flywheelsites.com\/getting-wages-when-employer-files-for-bankruptcy\/"},"modified":"2021-04-13T18:16:22","modified_gmt":"2021-04-13T22:16:22","slug":"getting-wages-when-employer-files-for-bankruptcy","status":"publish","type":"post","link":"https:\/\/ginsberg-gingras.com\/en\/getting-wages-when-employer-files-for-bankruptcy\/","title":{"rendered":"Getting back your Wages even when your Employer Files for Bankruptcy"},"content":{"rendered":"<p>If your employer files for bankruptcy, you will not automatically loose the wages he owes you. You will however have to be proactive if you wish to recuperate the amounts you are entitled to.<!--more--><\/p>\n<p>Even though wages are not necessarily regarded as preferred claims \u2014 also known as \u201csecured claims\u201d \u2014, <strong>you nonetheless do have some recourses at hand to recover your pay<\/strong>.<\/p>\n<h2>The Wage Earner Protection Program<\/h2>\n<p>For example, through Service Canada\u2019s <strong>Wage Earner Protection Program (WEPP)<\/strong>, you are guaranteed to retrieve some money. Provided you are eligible under the WEPP, you will be compensated for unpaid wages and vacation, severance and termination pay. Generally speaking, the eligibility period considered for the purpose of compensation corresponds to the six (6) months preceding the date of bankruptcy.<\/p>\n<p>This means you could then receive a compensation of <strong>up to $3,738<\/strong> (the maximum established for 2014). It is the maximum payment and it corresponds to four weeks of insurable employment insurance earnings.<\/p>\n<p>To receive such compensation, you must have received a notice of bankruptcy. The responsibility to send you this notice rests with the trustee in bankruptcy accountable for the administration of your former employer\u2019s bankruptcy. Once you have this document on hand, you will be able to complete the <a title=\"Wage Earner Protection Program Application\" href=\"https:\/\/srv212.services.gc.ca\/ihst\/Questionnaire.aspx?sid=06d6afd4-4edc-41f0-956b-27e34be906f4&amp;lc=eng&amp;iffsappid=PPS-WEPP&amp;iffssid=de6adf8b-2c24-43e0-865e-d75dee6fa982\" target=\"_blank\" rel=\"noopener noreferrer\">Wage Earner Protection Program Application<\/a> online, on Service Canada\u2019s Website.<\/p>\n<h2>To get your share of the bankruptcy dividends<\/h2>\n<p>If the compensation payable under the WEPP is less than the wages you are entitled to, <strong>the bankruptcy trustee will add you to the list of creditors<\/strong>. You will however be required to fill out a proof of claim, and to provide afterwards evidence of the validity of your claim.<\/p>\n<p>The trustee will build the bankruptcy assets by selling the property of the bankrupt. Then, he will prepare the bankruptcy dividends slip which lists the creditors to be paid. These dividends will be distributed according the priority of payment prescribed under <a title=\"Section 136 of the Bankruptcy and Insolvency Act\" href=\"http:\/\/laws-lois.justice.gc.ca\/eng\/acts\/B-3\/page-83.html\" target=\"_blank\" rel=\"noopener noreferrer\">Section 136<\/a> of the <em>Bankuptcy and Insolvency Act<\/em>.<\/p>\n<p>Although Section 136 states that you will be regarded as a \u201cpreferred\u201d creditor, things may be different for a part of the amount owed. In fact, you will only be entitled to such a status for the first $2 000 claimed. If you are eligible under the WEPP, and therefore allowed to recuperate some monies beyond this $2 000, you will then be regarded as an ordinary creditor for the balance of the salary amount claimed. Therefore, secured creditors \u2014 such as financial institutions holding a mortgage \u2014 will have priority over you.<\/p>\n<p><strong>Consequently, you are not guaranteed to get a compensation that exceeds the amounts received under the WEPP for your unpaid wages.<\/strong><\/p>\n<h2>The Commission des normes du travail<\/h2>\n<p>You still have not recuperated the full amount owed to you after the distribution of the dividends? If you are a Quebec resident, you have a last resort: the <strong>Commission des normes du travail (CNT)<\/strong>.<\/p>\n<p>You can actually file a complaint with the CNT to try and recover different amounts. This Quebec government organisation will then initiate, in your name, legal proceedings against the directors of the bankrupt company. Through this procedure, you could possibly get compensation for some amounts owed, including wages or vacation pay, or for still unpaid holidays and overtime.<\/p>\n<p>The CNT will accept your claim only if, after providing the trustee in bankruptcy with a proof of claim, it is submitted on time. For a federally incorporated company, this must be done within six (6) months after the date of the bankruptcy. For a company incorporated under the Quebec Law, this must be done within twelve (12) months after.<\/p>\n<p>This procedure is rather lengthy since it necessitates a court hearing. Furthermore, even if you succeed, <strong>it may prove difficult to get the amount specified in the judgement<\/strong>. The convicted directors could then refuse to pay, or they may have already disposed of all garnishable goods.<\/p>\n<h2>How about pension plans?<\/h2>\n<p>When a company files for bankruptcy, its pension plan doesn\u2019t go bankrupt too but it is terminated immediately. The remaining amount is then shared amongst the plan members and the pensioners.<\/p>\n<p><strong>Unfortunately, the plan may be in a deficit.<\/strong> In such a case, the plan members who contributed for years will not get a single penny.<\/p>\n<h2>The role of the bankruptcy trustee in all that<\/h2>\n<p>The bankruptcy trustee is not employed by the debtor who files for bankruptcy. His role is to allow an orderly settlement of a despairing situation. He must protect the interests of the creditors while making sure that the rights of the bankrupt are respected. In other words, he is an unbiased justice officer responsible for applying the provisions of the Law.<\/p>\n<p><strong>If your employer files for bankruptcy, the trustee will do everything possible to make sure you get any amount of money you are entitled to.<\/strong><\/p>\n<p>If you find out that your employer filed for bankruptcy and you have not received a notice of bankruptcy, you can check in the <a title=\"Bankruptcy and Insolvency Records Search\" href=\"https:\/\/www.ic.gc.ca\/app\/scr\/bsf-osb\/ins\/login.html?lang=eng\" target=\"_blank\" rel=\"noopener noreferrer\">Bankruptcy and Insolvency Records<\/a>. You will have to pay a minimum fee of $8 per search.<\/p>\n<p>For further information, please do not hesitate to contact a Ginsberg Gingras bankruptcy trustee.<\/p>\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If your employer files for bankruptcy, you will not automatically loose the wages he owes you. You will however have to be proactive if you wish to recuperate the amounts you are entitled to.<\/p>\n","protected":false},"author":38,"featured_media":5230,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[667,676],"tags":[768,740,757],"class_list":["post-5229","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-understand","tag-bankruptcy","tag-job-losses","tag-retail-stores-and-businesses"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.2 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Getting back your Wages even when your Employer Files for Bankruptcy | Ginsberg Gingras<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ginsberg-gingras.com\/en\/getting-wages-when-employer-files-for-bankruptcy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Getting back your Wages even when your Employer Files for Bankruptcy\" \/>\n<meta property=\"og:description\" content=\"If your employer files for bankruptcy, you will not automatically loose the wages he owes you. 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