Table employee claims beside secured claims

Key facts

Human involvement

Yellow · Close supervision

How AI is used

From the proofs and the wage records the lawyer supplies, list each amount the file describes as an employee claim, with the person and the document, and list each secured claim separately with the collateral the file names. Do not rank the claims and do not value the collateral.

What the lawyer must review

You rank the claims and you value any collateral. 11 U.S.C. § 507(a)(4) gives fourth priority to allowed unsecured claims, only to the extent of the dollar amount stated there, for each individual or corporation, earned within 180 days before the filing of the petition or the cessation of the debtor's business, whichever is first, for wages, salaries, or commissions, including vacation, severance, and sick leave pay earned by an individual, or for the sales commissions of an individual or a one-employee corporation acting as an independent contractor in the ordinary course, and only if, during the 12 months before that date, at least 75 percent of the amount that person or corporation earned as such an independent contractor was earned from the debtor. Section 507(a)(5) gives fifth priority to allowed unsecured claims for contributions to an employee benefit plan arising from services rendered within the same 180 days, limited for each plan to the number of employees covered by the plan multiplied by the stated dollar amount, less the aggregate paid to those employees under paragraph (4) and the aggregate the estate paid for them to any other employee benefit plan. The code text prints $10,000. The same page's adjustment note says that by notice dated 30 January 2025, 90 F.R. 8941, effective 1 April 2025, the dollar amount in subsection (a)(4) was adjusted from 15,150 to 17,150, and the dollar amount in subsection (a)(5)(B)(i) was adjusted from 15,150 to 17,150. You confirm which amount applies to the petition date. 11 U.S.C. § 506(a) says an allowed claim secured by a lien on property in which the estate has an interest, or subject to setoff under section 553, is a secured claim to the extent of the value of the creditor's interest in the estate's interest in that property, or to the extent of the setoff, and is an unsecured claim for the balance. Value is determined in light of the purpose of the valuation and the proposed disposition or use, and in conjunction with any hearing on that disposition or use or on a plan affecting the creditor's interest. Nothing in the opened text of section 507 puts these employee claims ahead of a security interest.

Written for / version

United States versionUS