Have you received a letter from the Social Security Administration (SSA) for collection of an overpayment? If so, you may want to know if this debt can be discharged in bankruptcy.
So, is overpayment debt dischargeable?
The good news is that most SSA overpayments are considered dischargeable. Basically, any unsecured debts that you have accumulated prior to filing bankruptcy will be discharged at the end of your case. However, this is not the case if any of your debts are deemed nondischargeable. Your Social Security overpayment will fall into this category, as will things like unemployment and welfare (or any other public benefit).
However, this does not mean that the SSA will not fight to have this debt classified as nondischargeable. They may argue that you have misrepresented your situation or used fraud. So, if this is the case, the likelihood of the SSA challenging the dischargeability increases dramatically. For this reason, we recommend that you have a trusted bankruptcy attorney at your side.
What Can You Do?
An attorney will be able to help you navigate through any pushback from the Social Security Administration (SSA) may give you. The SSA will need to prove that the overpayment is nondischargeable to the court by filing a claim. So, you will need to speak with your attorney about the circumstances tied to your overpayment. There are instances where this can be discharged through a Chapter 7 Bankruptcy.