Allow workers to claim more in unpaid wages and benefits in bankruptcy court

No new rules on bankruptcy and wages

Updated: Wednesday, January 6th, 2010 | By Angie Drobnic Holan

The federal government creates the rules that govern bankruptcy, which is when people or businesses go to court to declare they are officially out of money. Barack Obama pledged during the campaign to change the rules so that workers could ask the courts for more in unpaid wages and benefits from bankrupt employers.

That type of expansion would have to be approved by Congress, but Congress has taken no action on the matter. In fact, legislation has not even been introduced.

Samuel Gerdano, executive director of the American Bankruptcy Institute, confirmed the results of our search. The institute is an association for professionals including attorneys, judges, bankers and accountants who work on bankruptcy issues.

Gerdano said a similar provision had been part of legislation introduced in the previous Congress, in 2007, but no such legislation is pending now.

Because there's no movement to change the bankruptcy law, we rate this promise Stalled.

Sources:E-mail interview with Samuel Gerdano of the American Bankruptcy Institute

Thomas, H.R. 3652 , introduced Sept. 25, 2007