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Identifying ERISA Claims in Bankruptcy Cases

Posted by David P. Martin | Aug 04, 2020 | 0 Comments

As anyone with a bankruptcy practice knows, this area requires detailed attention to the law, a full client caseload, and a streamlined system for staff to help move cases along. However, quite often, bankruptcy claimants fail to communicate other claims, such as ERISA claims, that may impact their bankruptcy case and vice versa to their attorney or staff.

The worlds of bankruptcy and ERISA frequently intersect, sometimes like behemoths slugging it out; however, recognizing an ERISA claim may not be easy. While our firm does not handle bankruptcy cases and claims, we focus on ERISA and have learned how it imapcts other areas such as bankruptcy.

Below are a few tips on how to identify ERISA claims lurking in your clients' bankruptcy cases.

Step 1: Ask Claimants About Potential ERISA Claims

When first screening bankruptcy clients, it is useful to specifically ask claimants whether they have a potential long term disability, short term disability, accidental death and dismemberment, or retirement claim. Claimants frequently have suffered an injury or sickness which has put them out of work and has lead them to file bankruptcy.

Step 2: Ask Claimants About Their Employer, Benefits & Current Claim Status

If they have suffered an injury or sickness, then a few more questions are in order:

  • Who is their employer?
  • Does their employer offer benefits such as disability benefits, life insurance, or retirement?
  • If so, have they filed a claim for those benefits?
  • Will they file a claim at some point in the future?
  • Do they have a copy of their policy or plan document?

By asking these questions, you may identify a benefit that could assist your client while their bankruptcy claim is pending.

Step 3: Remember Application of an Added Amount Exempt from Bankruptcy

Upon identifying these potential benefit claims, it is crucial to remember the application of an added amount exempt from bankruptcy (Alabama Code § 27-14-31 – Exemption from debt of proceeds — Disability).

The proceeds or avails of all contracts or disability insurance and of provisions providing benefits on account of the insured's disability which are supplemental to life insurance or annuity contracts, heretofore or hereafter effected, shall be exempt from all liability for any debt of the insured and from any debt of the beneficiary existing at the time the proceeds are made available for his use. The exemption of income benefits payable as the result of disability shall not exceed an average of $250.00 of such benefits per month of the period of disability.

As you know, the bankruptcy code is silent on such matters; however, remembering this provision can benefit your client further.

Step 4: Other Things to Consider

  • Many retirement claims have a disability component which can also help.
  • Remember that a COBRA notice is required of many employers with 20 or more employees. Your client may not have been provided health insurance, and a penalty claim may be in the mix for that failure.

If you have identified a potential benefit claim for your bankruptcy client and need assistance with pursuing those benefits as a form of relief to your client, we are here to help.


We have created an easy-to-use ERISA Referrals Questionnaire in Bankruptcy Cases as well as a Client Questionnaire you can include in your screening packet for bankruptcy clients. Download those materials by clicking the links above.

What to Do Next

Once you or your client have completed the questionnaire, please return to us, and we will be in touch regarding the potential ERISA claim lurking in the bankruptcy case. We can take the ERISA claim from there (if you want), and you get the added benefit of a referral fee.

About the Author

David P. Martin

Senior & Managing Attorney


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