How to Handle Severance When Your Former Employer Files for Bankruptcy

Episode 50 of The Layoff Podcast tackles a nightmare scenario: your old company files for Chapter 7 or Chapter 11 after laying you off. Lucas and Luna break down how bankruptcy changes your severance claim, what the priority of unsecured creditors means for you, and the specific steps to take if your check bounces or your COBRA subsidy vanishes. They walk through the difference between a general unsecured claim and a priority wage claim, explain why the WARN Act might still protect you even if severance doesn't, and share what one listener learned after their former employer, a regional retailer with 2,000 employees, liquidated without paying severance. This episode is grounded in the latest data from the U.S. bankruptcy courts and one real case study from early 2026. If you're worried a former employer might go under before paying what you're owed, this is your playbook. #Severance #Bankruptcy #Layoffs #Chapter7 #Chapter11 #UnsecuredCreditor #WarnAct #COBRA #PriorityWageClaim #JobLoss #Termination #Careers #TheLayoffPodcast #FexingoBusiness #BusinessPodcast #EmploymentRights #FinancialPlanning #JobSearch Keep every episode free: buymeacoffee.com/fexingo