If a company files bankruptcy can employees collect unemployment - NYS Department of Labor eligibility?
My employer just filed Chapter 11 bankruptcy and laid off half the staff including me. I've been working there for 3 years as a warehouse supervisor. They said they might call us back if they restructure but honestly I don't think that's happening. Can I file for unemployment benefits through NYS Department of Labor even though it's a bankruptcy situation? I'm worried there might be some special rules that disqualify me since the company is bankrupt. Has anyone else dealt with this? I need to know if I should file my claim or if I'll just get denied.
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Ellie Perry
Yes, you can absolutely file for unemployment if your employer goes bankrupt! Bankruptcy doesn't disqualify you from UI benefits. Since you were laid off through no fault of your own, you meet the basic eligibility requirements. File your claim with NYS Department of Labor as soon as possible - don't wait. The fact that your employer is in bankruptcy proceedings actually strengthens your case because it clearly shows the layoff wasn't performance-related.
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Mohamed Anderson
•Thank you! That's such a relief. I was worried the bankruptcy would complicate things. Should I mention the Chapter 11 filing when I submit my application?
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Landon Morgan
I went through this exact situation 2 years ago when my company filed bankruptcy. NYS Department of Labor approved my claim without any issues. The key is that you were involuntarily separated from employment due to lack of work - that's textbook qualification for unemployment benefits. Make sure you have your final pay stub and any layoff notice they gave you. The bankruptcy actually makes your case stronger, not weaker.
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Teresa Boyd
•Did you have any problems with the weekly claims while the bankruptcy was ongoing? I'm worried about complications.
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Landon Morgan
•No problems at all with weekly claims. Just make sure to report any severance pay correctly if they give you any, and keep documenting your job search activities.
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Lourdes Fox
wait so bankruptcy doesn't affect unemployment at all?? my friend told me you can't get benefits if the company goes under because there's no money to pay into the system
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Ellie Perry
•Your friend is confused about how unemployment insurance works. Employers pay into the UI trust fund over time, not when you file a claim. The money for your benefits comes from that state fund, not directly from your bankrupt employer.
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Bruno Simmons
File immediately! I made the mistake of waiting when my company went bankrupt thinking I needed to see how the restructuring played out. You can always go back to work if they call you back, but you can't get retroactive benefits for weeks you didn't file. The NYS Department of Labor system doesn't care about the bankruptcy status - they only care that you lost your job through no fault of your own.
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Aileen Rodriguez
If you're having trouble getting through to NYS Department of Labor to ask questions about your specific situation, you might want to check out claimyr.com - they help people get connected to actual agents when the phone lines are swamped. There's a video demo at https://youtu.be/qyftW-mnTNI that shows how it works. I used it when I had questions about my claim status and it saved me hours of calling.
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Mohamed Anderson
•Thanks for the tip! I hate sitting on hold forever. Definitely going to check that out if I run into issues with my claim.
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Zane Gray
Just to add - if your employer owes you back wages when they filed bankruptcy, that's a separate issue from unemployment. You might be able to file a claim with the bankruptcy court for unpaid wages, but that doesn't affect your UI eligibility at all. Two completely different things.
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Carmen Diaz
I'm in a similar situation - my company just announced they're filing Chapter 7 (complete liquidation) next month and we're all getting laid off. Reading through these responses is really helpful! Quick question for those who've been through this - did you need any special documentation from the company about the bankruptcy filing itself, or was the standard layoff notice sufficient for NYS DOL? I want to make sure I have everything ready when I file my claim.
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