Can You Discharge Social Security Overpayment in Bankruptcy?

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If a person cannot work due to a disability and is found disabled by the Social Security Administration (SSA), then that person is entitled to receive a payment from the government as a result of the inability to earn a living. In some situations, the medical prognosis changes and that person can later return to work. When this happens there is a duty to inform the SSA about this change in the claimant’s physical ability and the Social Security Disability payments will stop. However, if no disclosure is made to the SSA, then the payments may continue to be received, which would result in an over payment to the claimant. If a person receives an overpayment, Section 204(a) of the Social Security Act, 42 U.S.C. § 404(a) (1976), authorizes a recovery or recoupment of overpayments by decreasing future benefits, should the person go back on disability again.

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