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I received an offer to sell my bankruptcy claim

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peted

Junior Member
State:CA

I have a severance claim against my bankrupt employer (large Canadian Telco company). I recently received an unsolicited offer to sell my claim for 0.85 on the dollar. They are asking for a 6% fee and will withhold 30% taxes. They have promised payment with 10 business days. I've reviewed the contract and am concerned about any restitution or repayment by me if the claim amount is less than my selling price or if the withholding is more than 30%. It sounds as if they are taking no risk, and the only benefit I am getting is an early check.

Would like some general feedback on the practice of buying severance claims and how (if) they benefit the seller (me).
 


LdiJ

Senior Member
State:CA

I have a severance claim against my bankrupt employer (large Canadian Telco company). I recently received an unsolicited offer to sell my claim for 0.85 on the dollar. They are asking for a 6% fee and will withhold 30% taxes. They have promised payment with 10 business days. I've reviewed the contract and am concerned about any restitution or repayment by me if the claim amount is less than my selling price or if the withholding is more than 30%. It sounds as if they are taking no risk, and the only benefit I am getting is an early check.

Would like some general feedback on the practice of buying severance claims and how (if) they benefit the seller (me).
The tax portion would be normal. Your employer also wouldn't have any liability if your income tax withholding was too small, that is always on you.

However, I wouldn't "sell" my claim to someone else if it means that they can ask me for money back if they cannot claim as much as they purchased it for. That's not a sale, its an advance.
 

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