Social Security Overpayments

Social Security overpayments are common, especially when people receive temporary Social Security disability benefits. Typically, overpayments happen when people get well enough to return to work but continue to receive disability payments from the Social Security Administration (SSA). A Social Security overpayment is a debt you have to pay back unless you file for bankruptcy. Bankruptcy is not your only option, but if you’re unable to repay a Social Security overpayment and you’re in or near Chicago, speak at once with an experienced Chicago bankruptcy lawyer.

Most people who receive overpayments are not aware that they are being overpaid. Most people promptly notify the SSA when they return to work, but if the payments continue, they trust that Social Security is “getting it right” and thus believe they still are eligible for benefits. Most people are confounded when they receive a letter from the SSA demanding repayment, which can be considerable. While taxes, criminal fines, and student loans cannot be discharged in bankruptcy, some debts to the government can be wiped out by a bankruptcy, including repayments to the SSA. Social Security overpayments are treated as general unsecured debts similar to credit card debts and medical bills.

Filing for chapter 7 or chapter 13 bankruptcy will allow you to discharge your debt to the SSA. However, and this is important, if the SSA believes you fraudulently accepted the additional payments – that is, if you accepted payments knowing that you weren’t eligible for them – the SSA can file a complaint in bankruptcy court to have the debt declared nondischargeable. However, fraud is difficult to prove; most people assume that they would not receiving a payment unless they are eligible for it. If you received a large Social Security overpayment in the Chicago area, and you are not able to pay it back, bankruptcy may or may not be the right option. Learn more by discussing your situation immediately with an experienced Chicago bankruptcy lawyer.