Will Your Workers Comp Benefits Stop If Your Employer Files for Bankruptcy?

Imagine suffering an injury at work and relying on workers’ compensation benefits to cover your medical expenses and lost wages, only for your employer to file for bankruptcy. You may be left wondering if you will still receive the financial support that you need during this difficult time.

The short answer is that an employer’s bankruptcy can impact your workers comp benefits, and you need an experienced Atlanta workers compensation lawyer to help you navigate this complex situation.

How Workers Comp Benefits Are Administered in Georgia

In Georgia, there are three ways that workers comp benefits can be administered: through a state-run program, an insurance company program, or self-administration by the employer.

Administration Through a State-Run Program

One way that workers comp benefits are administered in Georgia is through a state-run program. This means that the state government is responsible for overseeing and managing the distribution of benefits to injured employees.

The Georgia State Board of Workers’ Compensation (SBWC) handles all aspects of administering workers comp benefits, including processing claims, determining eligibility, and disbursing payments. Employers who participate in this program pay into a fund that is used to cover the costs associated with providing these benefits.

Administration Through an Insurance Company Program

In Georgia, employers can also choose to administer their workers’ comp benefits through an insurance company program. This means that the employer purchases a policy from an insurance company to cover any workplace injury claims made by employees.

Under this type of administration, the insurance company handles all aspects of the workers’ comp claim, including investigating and approving or denying claims, providing medical care and treatment to injured employees, and paying out any necessary benefits.

Employers who choose this option typically do so because it allows them to offload much of the administrative burden associated with managing workers’ compensation claims.

The insurance company may conduct its own investigation if your employer files for bankruptcy. During this period, the payment of your benefits may be delayed.

Self-Administration by the Employer

Some employers choose to self-administer their workers’ compensation benefits instead of going through a state-run or insurance company program. This means the employer handles all aspects of the claims process, including paying out benefits and making decisions about whether claims are valid.

Self-administration can be beneficial for some employers because it gives them greater control over the process and allows them to potentially save money on insurance premiums. However, it also comes with risks and responsibilities.

bankruptcy and workers compensation

Employers who choose to self-administer must comply with all relevant laws and regulations governing workers’ compensation in their state. They must also have adequate resources to manage claims effectively, including trained staff and proper record-keeping systems.

If an employer who self-administers files for bankruptcy, it can raise additional complications when it comes to workers’ compensation benefits. The bankruptcy court may become involved in deciding how much should be paid out to injured employees or even if any payments should be made at all.

Chapter 13 Bankruptcy and Workers Comp Benefits

Chapter 13 bankruptcy is a reorganization plan that allows an individual or business to repay their debts over a three to five-year period. During this time, the debtor must continue making payments on their workers’ compensation benefits if they are receiving them.

The amount of debt and the payment plan can affect how much money is available for workers’ comp payments. In some cases, these payments may be reduced in order to meet other financial obligations under the repayment plan.

If you’re concerned about your workers’ comp benefits during Chapter 13 bankruptcy, it’s crucial to seek advice from an experienced Atlanta workers compensation lawyer. They can help you understand your rights and options under Georgia law.

While Chapter 13 bankruptcy may have some impact on your workers’ comp benefits, there are legal protections in place to ensure that you receive fair treatment throughout the process. Working with a knowledgeable attorney can help safeguard your rights and interests during this difficult time.

Impact of Chapter 7 Bankruptcy on Workers Comp Benefits

Filing for Chapter 7 bankruptcy can have a significant impact on an employee’s workers’ comp benefits. When an employer files for this type of bankruptcy, they are essentially liquidating their assets to pay off debts. This means that any outstanding workers’ compensation claims will be treated as unsecured debt.

In many cases, the bankruptcy court may prioritize other creditors over injured employees seeking workers’ comp benefits. As a result, there is a high likelihood that the employee may not receive the full amount of their owed benefits or may experience delays in receiving payments.

Workers’ compensation claims are typically considered priority debts under bankruptcy law. This means that in certain circumstances, such as when there are funds remaining after paying secured and administrative expenses, employees may still be able to recover some or all of their owed benefits.

Let an Experienced Atlanta Workers Compensation Lawyer Defend Your Rights!

If you or someone you know is concerned about their workers comp benefits being affected by their employer’s bankruptcy, it’s important to seek legal guidance. An experienced Atlanta workers compensation lawyer can help defend your rights and ensure that you receive the benefits you’re entitled to.

Navigating the complexities of Georgia’s workers comp system can be challenging, especially when dealing with a potential bankruptcy situation. Don’t face this alone – let an attorney advocate for you and fight for the compensation and support you deserve.

Just because your employer has filed for bankruptcy doesn’t necessarily mean that your benefits will stop. With the right legal representation on your side, there are options available to protect your interests and secure the assistance you need.

We encourage you to schedule a free case review with us as soon as possible!