Q: Can you file bankruptcy on a social security disability judgement for repayment?
Owing the Social Security Administration a certain amount money, can you file bankruptcy if you cannot afford to pay that amount back?
A:
Yes, you can file for bankruptcy and list your Social Security overpayment as a debt. Both Chapter 7 and 13 bankruptcy have an automatic stay from recovery of any debt that arose before filing the bankruptcy petition, so Social Security will have to stop collection. https://secure.ssa.gov/poms.nsf/lnx/0202215195#f. Social Security may or may not file a claim in a bankruptcy and here is their policy guidance at https://secure.ssa.gov/poms.nsf/lnx/0202215195#f. Also, here is some basic policy information from Social Security's Program Operations Manual at https://secure.ssa.gov/poms.nsf/lnx/0202215185#c1.
The bankruptcy court's decision is binding on Social Security. A Social Security overpayment may be discharged by the court if there was no fraud involved. However, if the court dismisses the bankruptcy, Social Security may continue to pursue collection of the overpayment. Look to Federal bankruptcy law for more specific information.
You should also consider filing an appeal and/or waiver of the overpayment with Social Security. If you do not agree that you have been overpaid, or if you believe the amount is incorrect, appeal by filing Form SSA-561, Request for Reconsideration. If you do not want to pay the overpayment back because you did not cause the overpayment and you cannot afford to repay it, you should file Form SSA-632, Request for Waiver of Overpayment Recovery. The appeal and/or waiver can be adjudicated while your bankruptcy is pending.
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