Legal Question in Bankruptcy in New Mexico

Re: still employed by employer who has filed bankruptcy

The question does not state what type of bankruptcy. If the company filed a Chapter 7 bankruptcy, then it is liquidating its assets and is likely going out of business. If it filed a Chapter 11 or Chapter 13 case (reorganization), then it is likely to remain in business. Either way, allowed unsecured claims, (but only to the extent of $4,000 for each individual) earned within 90 days before the date of the filing of the petition or the date of the cessation of the debtor's business, whichever occurs first, for wages, salaries, or commissions, including vacation, severance, and sick leave pay earned by an individual, are priority claims. That type of claims are paid first before other classes of claims, but only to the extent there are funds available for distribution to creditors.

As to whether or not an employee is "at risk" by staying employed by a company in bankruptcy, certainly there is a risk of not being paid for services rendered anytime a company is suffering financial setbacks.