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Can Social Security Overpayments be Discharged in Bankruptcy?

On Behalf of | Mar 24, 2019 | Bankruptcy Basics, Seniors and Bankruptcy

Unless you have committed fraud, they are dischargeable.

Many retired or disabled individuals rely on Social Security benefits to pay for their necessities. If the Social Security Administration (SSA) mistakenly pays you more retirement or disability benefits than you are entitled to, it can come after you to collect the overpayment. Essentially, a Social Security overpayment is a debt you must pay back. But like most unsecured debts, unless there is fraud, the Social Security overpayments can generally be discharged in bankruptcy.

How Do Social Security Overpayments Happen?

Due to the complexity of Social Security laws and the large volume of payments issued, overpayments and mistakes happen regularly. Most overpayments occur because people lose their eligibility for disability or other benefits (typically when they get well enough to return to work) but the SSA continues to send them their benefit checks.

Often, people are not aware that they are receiving too much money. In fact, most people promptly notify the SSA when they return to work or experience a change that may affect their Social Security benefits. Therefore, if payments continue, they assume they are entitled to the money they receive.  As a result, most people are shocked and unprepared when SSA notifies them that they have been overpaid.

Social Security Overpayments Can Be Discharged in Bankruptcy

In bankruptcy, Social Security overpayments are treated as unsecured debts like credit card debt and medical bills. Therefore, if you are unable to pay back your Social Security overpayment, you can discharge (eliminate) your overpayment by filing bankruptcy

However, there are certain circumstances where your debt might not be discharged in bankruptcy. Because bankruptcy does not forgive debts obtained by false pretenses or other fraudulent means, you will not be able to discharge your debt if the SSA can prove that you knew you were not supposed to continue receiving the payments but kept them anyway. The SSA would have to file a complaint, called an adversary proceeding, in your bankruptcy to have the debt declared nondischargeable.  It is often difficult for the SSA to prove that you knew you should not have been receiving the payments or that you were receiving more than you should have.


If you received a letter stating that you owe the Social Security Administration money that you don’t have, getting relief through filing for bankruptcy can potentially be a great way to free yourself from the financial obligation of paying the money back. As experienced bankruptcy attorneys, we can help you through the entire process, provide a full evaluation, and ensure all debts are addressed accordingly. Contact Levitt & Slafkes, P.C. at (973) 323-2953 to schedule an appointment, or contact us online.

We are proudly designated as a debt relief agency by an Act of Congress.  We have proudly assisted consumers in filing for Bankruptcy Relief for over 30 years. The information on this website and blogs is for general information purposes only.  Nothing should be taken as legal advice for any individual case or situation.