Forced Bankruptcy

Discussion in 'Credit Talk' started by BigH, Oct 5, 2001.

  1. BigH

    BigH Guest

    Need some urgent advice here. I have been disabled for over eighteen years and have been
    collecting Social Security benefits. I was a victim
    of violent crime on the job, so I also collect workers
    comp. I get a letter from SS that they have decreased my benefit by 98 dollars a month and
    want an immediate payment of 21,000 dollars.
    I am on a fixed income and do not have it. My
    credit is good FICO 734 as of yesterday.

    Now I will have to declare BK. I am so po'd. I
    really do not want to screw my creditors. What
    would you do? Would you reaffirm everything other
    then SS? This has made me ill. If I had the b-lls,
    I would hang myself.

  2. tom65432

    tom65432 Well-Known Member

    I assume that what happened is that they overpaid you for some time, discovered their mistake, and now want you to pay for it. Their reasoning is that you did not deserve the benefits and therefore you must pay it back, regardless of who is at fault.

    There is an old legal theory - you cannot get blood out of a turnip. If you don't have the money, they can't get it. SS is difficult to deal with. If you think CA's and CRA's are impossible to deal with, try SS. You have to get some help. Because of your situation, you may qualify for free legal aid. Get on the phone and find out. I don't think you can do this yourself.

    It can be worked out. You just need some professional help. And, don't get any lawyer - get someone with experience dealing with SS.

    You may also consider contacting your representative in Congress and your Senators. They have people in their offices to help.
  3. bbauer

    bbauer Banned

    They have some sort of arbitration appeal board in place with SS and you can appeal any such decisions. It's not a court or anything like that, but they have a regulation in place where if they overpay you and it's not your fault and you can prove you don't have it and don't have any way to pay it, they will forgive it.

    I'm pretty sure your case sounds like one that ought to fit that situation pretty good.
    I'd contact SS and ask about that.

    Most likely you can get them to drop it if you try hard enough working with them.
    I doubt seriously that they are going to force you to file bankruptcy and it might not even do you any good to file Bk on them. Maybe they are like Student Loan in that respect.

    I don't know all that much about SS, but my son is on it and I've seen their letters saying a decision like that can be appealed.

    Give them a call and ask them about that.
  4. tom65432

    tom65432 Well-Known Member

    My experience with them is that they are very difficult to deal with. I think Bill and I have the same conclusion - this can be worked out. I feel that this is not a do it yourself project, you need help. Even with the hearing (as Bill suggests), you will need help. Their attitude is much like the CRA's and CA's - we don't make mistakes - it is your fault. Pay up or else.

    Bill brought up another point. I doubt that you could discharge a SS debt in bankruptcy.
  5. cariba

    cariba Well-Known Member

    I agree with the others, seek the help of your senators and representatives. Also seek the help of your local legal aid office and/or contact a local law school about their civil practice clinic--they will definitely do Social Security, and do a great job.

  6. Donna

    Donna Well-Known Member


    All is not lost. Don't give up hope. Others here have already offered some good advice.

    There was a point in my life when I too was a Social Security Disability recipient. Social Security is notorious for socking people with over payments.

    When the you-have-been-over-paid letter reached my mailbox, like you, I panicked. My budget was already stretched to the limit and where was I going to find extra money to pay these jokers!

    All of this happened over 20 years ago. I was much younger then, very scared and unaware of my rights.

    Social Security didn't force me to pay the money back in one lump sum. Instead, a specific amount was deducted from my check each month until the overpayment was satisfied. Being young and scared, I bit the bullet, tightened my financial belt even further and didn't stop the monthly deduction.

    If I had the situation to do over again now, I would go through the appeal process. Carefully reread the letter from Social Security. By law, they have to inform you of your rights and there should be a paragraph where they are clearly outlined. There is a time llimitation so get on this as soon as you can.

    As others here have stated, Social Security payments can't be included in your bankruptcy. Therefore, your best option is to go for an appeal. Give it your best shot. I bet you'll win.

  7. BigH

    BigH Guest

    Thanks for the replies. Well, after research on the
    net and finally calling a BK attorney I have found
    SS overpayments are fully dischargeable. What a
    relief. I also have filed today for a reconsideration
    under the law as well as what they call a waiver. I
    spoke to my Congressman's Office and they said the
    chances of a waiver are highly favorable as it was not
    me that caused the overpayment. So now I have to
    wait, and wait. But at least I know I will never have to PAY for their stupidity.+
  8. breeze

    breeze Well-Known Member

    Yayyyy! Hang in there. Man that must have been scarey!
  9. PsychDoc

    PsychDoc Well-Known Member

    BigH, I'm so glad for you! This thread is a terrific example of what the CreditNet community is all about. You presented a really frightening problem, received some great advice from several different viewpoints really quickly, and even took some steps toward a positive resolution all in the same day. Please keep us posted as this progresses!

  10. Saar

    Saar Banned

    BigH, I sure hope this doesn't require a BK and that you'll fight back.

    But as a general recommendation for people who plan on filing for BK: Before you do, carefully consider whether you should make a few balance transfers.

    We all know credit can be restored after BK - this forum is the ultimate proof. Once restored, you'd want to do business w/ the best lenders around (Amex, Citi, etc.) These lenders use blacklists. To avoid getting on their blacklists, make balance transfers to pay off your outsanding debt w/ them, so you don't have to include them in the BK. Also, since their next AR inquiry would make them close your account w/ a negative "closed by credit grantor" notation, you'd be well advised to close these accounts yourself once they're paid off and the balance transfer checks are posted.

    This would keep some positive tradelines on your post-BK reports, and allow you to do business w/ the best lenders once again, after you get back on your feet.

  11. author_22

    author_22 Well-Known Member

    OK, what you need to do is decide if you can keep any of the cards in decent standing.

    Can you pay off some of them or BT them out? It's a bitch to be on a blacklist. CapOne may forgive you (it happened to me) but I hear AMEX, Citi, and Chase have good memories.

    Associates has a blacklist too. You want to put yourself in the best situation for after BK rebuilding.

    My parents did BK in 1986. My mother had 27 positive accounts before then, and my father suddenly lost his $150K a year job and couldn't get a new one for 18 months.

    I'm not going to lie, it was hard and embarrassing for them (the names got printed in the newspaper.) I couldn't understand for years why we couldn't get new cars anymore, or reserve hotels. They didn't rebuild. They got upset and gave up, then dad lost job again, and now they have some derogs...but I hope it'll be well again one day.

    You might get any remaining cards closed after BK, but at least it won't be because of a charge off.

    I'm not condemning you, I understand why people file BK and you sound sincere. I just want to offer my limited experience and share what others have told people.


  12. Kittw1

    Kittw1 Well-Known Member

    And remeber Associates and citi are the same people now.

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