Legal Question in Bankruptcy in California

Bankruptcy Claim for unpaid wages
I worked for a woman for many years and like everyone else she hired I was hired as a contractor. She had a company and when she paid me she usually wrote me a company check, sometimes a personal check, and occasionally would pay me cash and I would get a 1099 from the company. At some point her business began to fail and to help her out I agreed to work several months with only minimal pay. When all was said and done I had accumulated $9,000.00 of invoices that she could not pay. She ended up claiming (personal) bankruptcy but just before she did this she gave me her $5000.00 car as partial payment but I was still left with $4000.00 in unpaid invoices. My question is, in her bankruptcy, is she personally responsible for this debt and do I have a valid claim against her estate? Or is this a business debt? What if she listed my $4000.00 as one of her debts? Can I get my invoices paid by her estate?

Asked on 3/23/09, 1:20 pm

3 Answers from Attorneys

David Gibbs The Gibbs Law Firm, APC

0 users found helpful

0 attorneys agreed

Re: Bankruptcy Claim for unpaid wages

The first question you must answer is were you an employee or a true independent contractor. The State of California Department of Employment Development (EDD) has a lot of good information about how to tell if you are an employee or an independent contractor. They lean very heavily in favor of finding people employees. If you were an employee, then what she owes you takes on the character of wages, and becomes (if you file it as such) a priority claim in her bankruptcy. I would do two things if I were you. First, file a Proof of Claim for what is owed in her bankruptcy. Characterize them as wages, and when (if) they object to the claim, you can litigate the issue of whether or not you were an employee or contractor. Second, I would file a claim with the EDD against the company (assuming its not in bankruptcy) for unpaid wages. I would in your complaint with EDD make the case that you were an employee all this time, and that the company owes back taxes on what you were paid, and wages for what you were not. First, review the EDD website and make sure you can legitimately claim to be an employee. Unless you hold a license and ran your own company, its pretty likely you were not really a contractor.

*Due to the limitations of the LawGuru Forums, The Gibbs Law Firm, APC's (the "Firm") participation in responding to questions posted herein does not constitute legal advice, nor legal representation of the person or entity posting a question. No Attorney/Client relationship is or shall be construed to be created hereby. The information provided is general and requires that the poster obtain specific legal advice from an attorney. The poster shall not rely upon the information provided herein as legal advice nor as the basis for making any decisions of legal consequence.

Answered on 3/23/09, 2:41 pm

Mark as helpful

David Gibbs The Gibbs Law Firm, APC

0 users found helpful

0 attorneys agreed

Re: Bankruptcy Claim for unpaid wages

One more thing I forgot to mention in the prior post. You may have an issue with the car she gave you just before filing. Transferring assets just prior to filing bankruptcy can be characterized as a preference or a fraudulent conveyance. If the Trustee finds out about this transfer (she should have listed it in her Statement of Financial Affairs), you can expect to be sued by the Trustee to recover the car. If you have sold the car, then they will come after you for the money you received and/or fair value of the car. After reconsidering this, you may wish to consult with an attorney to see what you can and cannot do. I'm in San Clemente (not too far up the freeway) if you want to give me a call or email me to discuss this further.

Answered on 3/23/09, 2:45 pm

Mark as helpful