Scenario: when an enterprise goes bankrupt, employees ask first: will I recover my months of unpaid wages, and where do I stand in the queue for the asset pool? The good news is that wage debts rank among the highest priorities in bankruptcy under Law 142/2025/QH15 — but ranking only counts if employees know how to join the right queue, through the right door, on time. This article sets out the priority order and the practical wage-recovery path.
The payment priority order in bankruptcy: where do wages stand?
When bankruptcy assets cannot cover all debts — the common case — bankruptcy law distributes by a hard priority order. Under the structure of Law 142/2025/QH15, the order runs: (1) bankruptcy costs; (2) wage debts, severance allowances, social insurance, health insurance and other employee entitlements under signed labour contracts; (3) new debts incurred for rehabilitation (if rehabilitation fails); (4) financial obligations to the State; (5) secured creditors — paid from collateral value, with any shortfall dropping into the unsecured group; (6) unsecured creditors, sharing pro rata.
Second place for wages is very practical: it stands above even the State budget (taxes) and above most trade creditors. A bankrupt enterprise still holding a factory and machinery to sell means that, after procedure costs, employees are the first group to touch money. But this order applies only to wage debts recognised in the proceedings — unfiled, unproven wage claims make the fine ranking meaningless.
What employees must do to enter the priority queue
- File the wage claim on time: when proceedings open, employees (or their representative, or the union) send a claim with evidence within the 15-day window under Article 55 of Law 142/2025 — labour contract, payroll records, insurance book, termination decisions;
- Check the published creditor list: is your wage amount fully recorded by the asset manager; if short, seek review within 10 days of the list’s publication;
- Send representatives to the creditors’ meeting: employees have a voice at the meeting — where rehabilitation or liquidation is decided; with large wage arrears, participating (directly or via representatives/union) protects outcomes favourable to wage payment;
- Follow the distribution stage: once assets are sold, distribution follows the order; employees should track information via the asset manager and their representatives so as not to be «forgotten» at payout.
Related labour entitlements: insurance, severance, wage arrears
Beyond unpaid monthly wages, the labour-entitlement «family» in bankruptcy includes: severance allowances, unpaid social and health insurance contributions (which directly affect pension, maternity and sickness entitlements even after the enterprise dies), and other entitlements under signed labour contracts. All must be fully claimed — omit an item and the chance for that item is lost, because distribution runs only on the established creditor list.
The hard truth, stated plainly: high priority does not guarantee full recovery. If bankruptcy assets are minimal (or were dissipated beforehand), after bankruptcy costs there may be nothing left for group two. That is why employees and unions should act early, at the first signs of insolvency — push claims in, request review of dissipating transactions under Article 49 — rather than starting to run only on the day bankruptcy is declared.
Frequently asked questions
Are wage debts prioritised in bankruptcy?
Yes — wages, severance, social and health insurance of employees rank second in the distribution order under Law 142/2025, right after bankruptcy costs and ahead of both taxes and ordinary trade creditors. The condition is that the claim is filed and recognised in the proceedings.
What documents do employees need to claim unpaid wages in bankruptcy?
A claim within 15 days of the opening decision (Article 55), with the labour contract, payroll records, social insurance book and termination papers if any. Claims may be filed through employee representatives or the grassroots union.
What about unpaid social insurance contributions?
Unpaid social and health insurance contributions belong to the labour-entitlement group claimed in bankruptcy alongside wages. How much is distributed decides whether missing contribution periods get recorded — follow closely via the asset manager and the insurance authority.
What if bankruptcy assets cannot cover the wages?
Distribution stops at the group the money reaches: bankruptcy costs first, the remainder to the wage group; if insufficient, pro rata within the group. Early action — timely filing, pushing review of dissipated transactions — is the only way to raise recovery chances.
This article has been quality-reviewed by the FLAW AI Legal Council