Bankruptcy/Insolvency

Advisory Bulletins


Bankruptcy

When an employer files for bankruptcy, its assets are typically frozen, and money may not be paid out to creditors, including employees. Employees typically have a higher priority in bankruptcy than many other creditors.

If your employer has filed for bankruptcy you will need to contact the appropriate bankruptcy court to enter a claim. The bankruptcy court for Colorado may be contacted at:

U.S. Bankruptcy Court for the District of Colorado
U.S. Custom House, 721 19th Street
Denver, CO 80202-2508
(720) 904-7300

Wages as a Preferred Claim

When the business of any person, corporation, company, or firm is suspended by the action of creditors or put into the hands of a receiver or trustee, the debts owing to laborers, servants, or employees, which have occurred by reason of their labor or employment shall be considered and treated as preferred claims. Such laborers or employees shall be preferred creditors and shall first be paid in full. If there are not sufficient funds to pay them in full, they shall be paid from the proceeds of the sale of the property seized.

Statement of Preferred Claim

Any laborer, servant, or employee desiring to enforce his claim for wages under this article shall present a statement under oath showing the amount due, the kind of work for which the wages are due, and when performed to the officer, person, or court charged with the property within twenty days after the seizure thereof on any execution or writ of attachment or within sixty days after same has been placed in the hands of any receiver or trustee, and thereupon it is the duty of the person or court having or receiving such statement to pay the amount of the claim to the person entitled thereto.


References

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Colorado Division of Labor | 303-318-8441 | Contact Us