Social Security Overpayments Discharged in Bankruptcy?

Unless you receive money from the government yourself, such as social security benefits, you may not realize how often mistakes are made. Sometimes people are overpaid by the government. If this happens to you, it’s just a matter of time before the government comes back to collect those funds. When you’re living on social security benefits, and your expected to pay back large sums of money you didn’t expect to have to pay, this can cause a real hardship on you and your family.

In Chapter 7 or Chapter 13 bankruptcy, the debt you owe to the Social Security Administration, (SSA), may be wiped clean.  If you received a large amount of money from a social security overpayment and can’t pay it back; contact a Debt Advisors bankruptcy attorney for more information.

Social Security Payment Mistakes can Be Discharged in Bankruptcy

The Social Security Act was signed into law back in 1935. The purpose of Social Security has always been to provide benefits to those in need.  This includes income benefits to the disabled and retired citizens over the age of 65. For these people, it is nearly impossible to repay Social Security debt because they have no way of working for it. If the Social Security Administration makes a mistake, it will want you to reimburse them, regardless of your age or disabilities.

Reasons Why Social Security Overpayments Happen

Social Security overpayments are usually due to changes in the beneficiary’s status that changes the amount of benefits due.  The change in status can result in losing eligibility for disability benefits altogether. However, payments may keep coming for a period of time.  People are mostly unaware that they are being overpaid.  You can imagine that they are pretty shocked when they receive a letter from the Social Security Administration, demanding repayment.  The amounts vary from a few thousand dollars to tens of thousands of dollars.

Even if the overpayment mistake was not your fault, you have to prove to the SSA that paying back the debt would create a financial hardship.  It is more likely that you’ll have to pay this money back.  Either dip into your savings account, make payments, or do nothing and they’ll stop sending checks until the amount has been reimbursed in full.   If these aren’t realistic options for you there is another saving grace; that is to file bankruptcy.

Social Security Overpayments Discharged in Bankruptcy
Yes, you can wipe out debt, including a Social Security overpayment by filing bankruptcy.  Make an appointment with Debt Advisors Law Offices for a free bankruptcy consultation.  In that discussion, you’ll learn more about whether or not bankruptcy may be the best option for you.