Social Security Overpayments and Bankruptcy

Q: I have a notice from Social Security that I owe them money for overpayments. My husband died recently after a lengthy illness, and I am planning to file for bankruptcy because of the medical bills and other expenses incurred by his illness. I don’t have the money to repay, and am terrified of what could happen. I can’t think of anything that would have changed my status, or his. What can I do?

CAN SOCIAL SECURITY OVERPAYMENTS BE DISCHARGED IN BANKRUPTCY?

A: I am very sorry for your loss and for your difficulties. Generally, when the SSA sends a notice of an overpayment, it’s because there has been some change in status reported – erroneous though that change may be. It’s possible that someone may have obtained your Social Security number and is using it fraudulently. If it turns out that your number is being used by someone else in a case of identity theft, you are off the hook for the payments.

However, if you have not been the victim of identity theft, the clock is ticking. You have 30 days to ask for reconsideration and dispute the finding of overpayment. Even in the even that they do not reconsider, you can appeal for an administrative hearing before a judge. If you do not respond or SSA refuses to reconsider, your benefits will be attached 30 days after the finding. You can also apply for a waiver if you can’t afford to repay the amount. You must prove that you are without fault, and that you would be harmed or unable to pay basic expenses such as rent or your mortgage, buy food or medicine, or pay for utilities and other daily needs.

Now, as to being able to discharge Social Security overpayments in bankruptcy? Yes, it is possible to discharge this debt in bankruptcy. Just as with all other legitimate debts, this is subject to the automatic stay. And as with all other debts in bankruptcy court, it is subject to dispute by the creditor – though this is rare in cases when there is no fraud involved in the overpayment. If the recovery is already underway, SSA procedure is to refund recovered monies that were taken in the same month as the petition was filed. However, a recent decision in Georgia of Rodriguez v. United States – Case No. 09-93431-JB – Judge Joyce Bihary ruled that the SSA’s failures to follow its own procedure in processing a debtor’s waiver request paperwork had bearing on the discharge status of the debt.

I’d like to get a better handle on this, and give you more advice than I can via this medium. If you’d gather your paperwork and come to the office for a consultation free of charge, I think I can help you with getting your dealings with the SSA in order, help you with your bankruptcy, and then try to tame those medical bills. I’m sorry for your loss, and you shouldn’t be struggling with this alone. Please, get in touch with either of our offices.

Get More Information

Share
Published by
Chad Van Horn

Recent Posts

How Long After Chapter 13 Bankruptcy Can I Sell My House?

Most people who file for bankruptcy are also looking to move on from the situation…

7 hours ago

Bite Sized Law: FL 222.11 Exemption of Wages from Garnishment

Let's get started on understanding 222.11 exemption of wages from garnishment!

1 week ago

Can You Convert Chapter 13 to Chapter 7 Bankruptcy?

The bankruptcy code does allow you to convert chapter 13 to chapter 7 bankruptcy when…

2 weeks ago

Does Bankruptcy Affect Security Clearance?

There are lots of factors taken into consideration if bankruptcy affects security clearance.

3 weeks ago

Chapter 7 Personal Bankruptcy Basics: Everything You Need to Know About the Process

Want to know the Chapter 7 personal bankruptcy basics about who qualifies for the bankruptcy?…

4 weeks ago

What Happens if an Employer Ignores a Wage Garnishment?

Failure to submit to these responsibilities could even lead to jail time for them. By…

1 month ago