Social Security Overpayments and Bankruptcy

Sometimes, through no fault of yours, the Social Security Administration overpays your social security income benefits. Unlike unemployment compensation overpayment where it is easy to see you should not continue to receive benefits after you have returned to work, with social security income benefits it is more difficult for you to detect that there has been an overpayment of benefits.

When there has been an overpayment of social security income benefits, the Social Security Administration does not charge any fees or interest as a result of the overpayment of benefits. The way the Social Security Administration resolves the matter is by reducing your monthly social security income benefits by 10% until the amount of the overpayment has been “paid back.”

Although you can file for bankruptcy to eliminate many types of debts, a bankruptcy will not discharge your obligation to repay social security income overpayments. You can file for bankruptcy to eliminate most if not all of your other debt, and combine this with remedies available through the Social Security Administration to resolve the social security income overpayments.

There are three ways to resolve social security income overpayments. (1) You can fill out Form SSA-561, Request for Reconsideration. This is for when you do not agree you have been overpaid or if you believe the amount of the overpayment is incorrect. (2) You can fill out Form SSA-632, Request for Waiver of Overpayment Recovery. This is for when you agree you have been overpaid but you should not have to pay it back because you did not cause the overpayment and you cannot afford to repay it. (3) You can fill out Form SSA-634, Request for Change in Overpayment Recovery Rate. This is for when you agree you have been overpaid, but cannot afford to pay it back at the rate the Social Security Administration told you in the notification of overpayment letter they mailed you.

The above information is a general overview and is not intended to be used as legal advice. If you are considering filing for bankruptcy, the best thing to do is call our office at 248-557-3645 and schedule a free consultation so you can receive advice which is tailored to your specific circumstances.

By: Michael Benkstein, Esq.

Managing Attorney, Bankruptcy Department

The Law Offices of Joumana Kayrouz, PLLC

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