Legal advise?

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Ron Mc

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My son just received papers that states that the pathetic gentleman that owned a Cold Stone ice cream shop has filed bankruptcy and will not be paying him the 3 weeks worth of wages that are owed.
The odd thing is that his attorney mailed us the papers after the deadline to contest has past.

I will be contacting the Texas attorney general as well as the BBB with a copy of the bankruptcy papers and the post marked envelope to prove it.

Is there anything else I can do so that my 17 year old son (16 at the time) can get the money owed to him?
 
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I think he may have a good shot at getting his money. My understanding is that the Bankruptcy Judge lists the debts in order of payoff in accordance with the law and If I remeber correctly, labor wages for hourly employees is first due to the Federal Labor laws, followed by Secured creditors, thye unsecured creditors. The problem is that it may take several months before he receives anything. In the meantime I would contact the Texas Labor Commission first and file with them for the amounts owed.
They have the resources and people to do a lot of legwork for you and they know the law even better than some attorneys do

Rob
 
I'm with Rob. I think I would talk to the NLRB (National Labor Relations Board.) They don't take kindly to folks abusing their workforce, and I wouldn't bet too much on his being "far down on the list" of creditors. Wish you luck, Ron.
 
I would think the labor board would not like this type of thing much. If it is a minor the child labor laws are pretty strict when it comes to employeers. I would also file a small claims suit against the business and owner if I had to just to make sure the bankruptcy court sees it.
 
This is really a shame. We try to teach kids that you need to work to earn your money, then something like this happens. I bet it will take him a quite a while to get over the feeling of being cheated. I hope he gets his earned money ASAP. Wish him luck.
 
Originally posted by great12b4ever
<br />I think he may have a good shot at getting his money. My understanding is that the Bankruptcy Judge lists the debts in order of payoff in accordance with the law and If I remeber correctly, labor wages for hourly employees is first due to the Federal Labor laws, followed by Secured creditors, thye unsecured creditors. The problem is that it may take several months before he receives anything. In the meantime I would contact the Texas Labor Commission first and file with them for the amounts owed.
They have the resources and people to do a lot of legwork for you and they know the law even better than some attorneys do

Rob
Click to expand...

Unfortunately, employees due past wages are considered "unsecured" creditors. They will fall into the last of the creditors to be paid.

However, Lawyers are the FIRST to be paid during a bankruptcy. Since it is obvious that this lawyer failed to send you the creditors notice in a proper time, I would recommending contacting your local Bar association and report the attorney. At the same time, notify the bankruptcy court that you were notified late and petition that they reopen the filing period.

Even if you receive not money for the wages due, I would cause a lot of headaches for this attorney's negligence.
 
Bankruptcy is a bizarre road to navigate. Although bankruptcy courts are federal courts, bankruptcy laws vary by state.

Your son will want to file a claimwith the bankruptcy court, presuming the "bar date" hasn't passed. That's the date after which the court bars further claims.

A lot will depend on the type of bankruptcy filed...full liquidation or reorganization.

An internet search of "Texas bankruptcy laws" should give you a good bit of information. There are usually sites particular by state that can advise how to file a claim, etc.

Good luck in your efforts. Regardless of the outcome, your son will have gained a valuable (albeit somewhat frustrating) experience that may serve him well in later life.

John B.
 
Best advice you can get is from a lawyer.

Sometimes it's best just to write it off.

If you want to pi$$ off the SOB, send the owner a 1099 Misc Income form. I think it needs to be mailed by 1/30/08 and wait until the last minute to send it. Fill it out with the amount of income your son should have received (before taxes). Since the owner never paid out the salary to your son, this can be considered an income and he will need to pay income taxes on the amount

Oh, and report this lawyer to the bar association
 
Sadly, your son will be the loser. Usually, when the lawyers for the party filing bankruptcy set things up, there are little to no assets to be distributed. Late date of the letter means nothing. Unless Texas has some unique laws regarding paying of wages, there is little to no hope for the kid. There may be some relief under Federal minimum wage laws. You can check with the Dept. of Labor. I don't know how that will work if there is not money to pay him with. And, if he was earning over min. wage and, even if he is successful with this approach, all he will receive is min. wage for the hours owed.
 
Originally posted by wdcav1952
<br />Regardless of the outcome, Ron, I feel for your son. I hope he appreciates how his father chooses to stand up and do his best to protect the rights of his son.
Click to expand...

That can be a bitter-sweet experience. My son had a similar experience with a small start-up local TV station he worked at when he was in high school. The station folded owing him back wages. We sued and won in small claims court. Dad came through for his kid. Or so I thought. We got the judgement and tried to collect. Rotsaruck. Business was incorporated and had no assets. Owner was shielded because my son worked for the corporation, not the individual. Pop got egg on face.
 
That's too bad, Ron. From experience I can tell you that the Texas Attorney General's office is a good start. I've never sent a complaint to them that they didn't get resolved.
 
I think the best thing to do is to file to TRY and get the money back. The suggestion to harass the owner with income tax forms is not the politest thing to do - the fellow has NO assets (bankrupt), and he cannot pay the income tax...have a little sympathy for someone who has lost much, much more than your son has.

Imagine how you'd feel if your life's work was suddenly ended - the poor old guy's in rough shape! Your son is out three weeks of wages, but he is out ALL of his money, his property, and his life's work.

Don't get me wrong, I feel very sorry for your son and the others who lost in the deal, but I feel even worse for the person who lost his business and his reputation because of poor financial decisions. The old man's lost enough - go through the proper channels and try and get your son his money, but realize that there are many others in the same boat...if you don't win, think on it as a learning experience, and hope that your son learns the value of financial planning from this experience. It sucks, but it happens.

Andrew
 
Andrew, you never know about bankruptcy, especially when a business is involved. If the business went bankrupt, and was properly protected via a corporation, the owner is out nothing. And, he may have squirreled away assets prior to the (planned?) bankruptcy. Even with bankrupt, Fed. income taxes must be paid, they are not wiped out. In many, maybe most, states, a bankruptcy will still leave the person filing with their home. Florida is most famous for this. Are you rich and want to protect your money from debts that are piling up? Just move to Florida, buy an expensive home with all your money (like $1 million to $10 million), file bankruptcy. You get to keep the home, and, I believe your car, then sell the house and get yer bucks back free and clear. Don't always feel sorry for the filer. Sometimes life can be rough and a bankrupt is the only way out. Yes, that can be tough. But, without all the facts you don't know.
 
Well, it's in my character to be optimistic, so I guess that's why I'm sometimes taken for a ride...I tend to believe the best in people...

I didn't know that you could have your business go bankrupt and not go bankrupt yourself....seems quite dishonest to me.

Andrew
 
I agree, file the forms, and put any possible pressure on the employer. I lost almost two months wages to an employer's "bankruptcy", and I never got to get my personal tools and supplies out of the building. Add in money I paid for professional licenses, and specialized training that I was to be reimbursed for, and I was out about four month's worth of wages. Business owner was open in a couple of weeks in his wife's name, with a new truck, and a big addition on to their house, and I had to sell off everything I owned to make the monthly payments. I ended up getting a loan from family members, and finding another job quickly, but it still took me a couple of years to get any kind of balance back in the bank book.

The lawyers get paid first, and the labor gets paid last. File the tax forms, and declare it a loss. If you don't, you will have to pay taxes on the money you never got! (At least that's what happened to me in N.H. ) Also, if he profits off of your Son's loss, then at least he will get most of it ripped out in taxes. That was one of my big mistakes. I ended up having to pay taxes on the pay I never got, and pay taxes on the training I took at face value. If I had filed the forms correctly, I could have written this all off as a loss. Also, if the papers were late, put pressure on the Attorney. A very popular M.O. for legal types is to screw over the people who don't have enough at stake to fight back. If you lost your right to file a claim, at least file a complaint. Any good Judge will end up giving the offending lawyer a sharp rap on the nose if nothing else. At least it will be on his record.

Good luck, but it sounds like a tough lesson learned. Keep us posted on how it works out.

Dave
 
Personal and corporate bankruptcy are different.

Yes, your corp can file bankruptcy (Ch 7 or 13) and you can, personally, be fine.

However, a small business, corp or not, is usually secured by the assets of the owner, including his home. And, Federal Bankruptcy laws allow you to shield your house up to a certain dollar amount (used to be $60K for the last customer I had that filed - 1990ish). State laws differ by state, in Wisconsin it WAS better to go with the fed, state allowed you to keep less.

EVERYONE gets hurt in bankruptcy - Chapter 7.

Three weeks' wages IS a LOT to a teenager. I remember losing about that much at a carnival, in my teens. The operative words are, "I remember". I carried that lesson from then til now. My college COST a lot MORE, but the lessons did NOT stay as firmly in my mind.

Good education costs you dearly.

If it were MY son, Ron would be writing this to ME.

Don't ANYONE crap on MY KID!!!!! (You're a good dad, Ron!!)[;)][;)][;)]
 
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