Discharging Social Security Overpayments in Bankruptcy

Posted By Law Office of Simon Goldenberg, PLLC || 20-Jan-2017

Many retired or disabled individuals rely on the payments they receive from the Social Security Administration (SSA) to pay for their necessities. Unfortunately, the SSA can make mistakes and actually disburse too much money or even send payments to individuals that no longer qualify for such benefits. When an overpayment happens, the money will need to be returned.

While getting an extra check or a check that is too large may feel like a mistake that has gone in your favor, that money is actually treated like a debt until you return the money.

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How Do Social Security Overpayments Happen?

It may seem like overpayments from the Social Security Administration don't occur that often. Unfortunately, with the amount of paperwork and processing that goes into qualifying for payments, mistake do arise with some frequency.

Once of the biggest problems with social security overpayments is that people rarely realize they are receiving too much money. Many people get their check in the mail and assume that there are no issues, giving them the freedom to pay off their debts or buy merchandize. They continue this without any indication that something is amiss.

Not knowing that there may be an issue leaves many individuals completely unprepared to return the money when they are notified that they have been overpaid. Because they assume the money they receive is theirs for the spending, they may not have the money in their bank accounts to easily return.

Can Social Security Overpayments Be Discharged in Bankruptcy?

If you are unable to repay the money that you owe for social security overpayments, you may qualify to seek to discharge those debts through filing for bankruptcy. Because a social security overpayment is considered an unsecured debt, it would be treated the same as other unsecured debts, such as credit card debt.

To begin the bankruptcy process and discuss how chapter 7 bankruptcy can help you find relief from your debt, contact the Law Office of Simon Goldenberg, PLLC.

However, there are certain circumstances where your debt may not be discharged, even with bankruptcy. Because bankruptcy does not forgive debts that have been obtained under fraudulent pretenses, you will not be able to discharge your debt if the Social Security Administration can prove that you knew you were not to continue receiving the payments but did so anyway.

If the Social Security Administration is able to have your account designated as non-dischargeable debt, you can still be held responsible for repaying the money. However, it could be difficult for the Social Security Administration to prove you knew that you should not be receiving the payments or that you knew you were receiving too much money.

Relief From Social Security Overpayment Debt

If you received a letter stating that you owe the Social Security Administration money that you don’t have, getting relief through filing for bankruptcy can potentially be a great way to free yourself from the financial obligation of paying the money back.

As experienced debt relief attorneys, we can help you through the entire process, provide a full evaluation, and ensure all debts are addressed accordingly.

Call (888) 301-0584 today to schedule your confidential case review.

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