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Most of Debtor’s Claim to Vacation Pay Exempt From Bankruptcy

Dec. 16, 2019, 2:49 PM

A debtor who filed for bankruptcy protection after losing his job can shield most of his claim against his employer for $24,000 in vacation pay from his creditors, the Seventh Circuit said.

Under Illinois law, 85% of a debtor’s unpaid wages are exempt from creditors’ claims, and the state treats vacation pay as a form of wages, the opinion by Judge Frank H. Easterbrook said Dec. 13.

The trustee handling George Burciaga’s bankruptcy estate objected to using the exemption should his claim for unused vacation time be successful. Refusing to recognize the exemption, the district judge said that Illinois didn’t ...