What to Do When Social Security Says You Owe Them Money

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Like any other person, business, or agency in the world, the Social Security Administration (SSA) makes mistakes. Possibly one of the most common is accidentally paying a person more money than the individual is entitled to. Whether or not you knew you were being overpaid, the SSA will attempt to get that money back from you. Here are your options for handling SSA overpayment debt.

File a Request to Reconsider

If you feel the SSA is mistaken and that you don't owe the money or you disagree about the amount of the overpayment, you can file an appeal and request the agency reconsider the claim. Typically, you'll need to furnish evidence supporting your claim. For example, if the agency claims it overpaid you because it believes you began working, you'll need to provide evidence that you were unemployed during that time period.

To submit a reconsideration request, download and fill out the Request for Reconsideration form and send it to your local agency. SSA will suspend all collection activities while it considers your case.

File a Request to Waiver Overpayment

You can ask the SSA to waive the repayment requirement altogether. However, the agency will only consider the request if you can prove you didn't cause the overpayment or they made false claims on your application. You must also prove

  1. You can't afford to pay back the money
  2. You relied on those overpayments and worsened your situation as a result (you took out a mortgage for example)
  3. You were given bad information from an official source and relied upon that information when applying for benefits

To start the process, download the Request for Waiver of Overpayment Recovery or Change in Repayment Rate form and mail it to the agency. If you can pay some but not all of the debt, be certain to write in the amount you want waived. You'll also need to supply the agency with detailed information about your finances, which may entail furnishing copies of your monthly bills.

Negotiate Settlement

If you do owe the money but can only pay a portion of what's due, the SSA may be willing to negotiate a settlement with you, especially if you can pay most of the bill. For instance, if you can pay at least 60 to 80 percent, then the agency may be willing to take the 20 to 40 percent loss to resolve the issue.

The caveat with this option is you must pay the negotiated amount in full. To take advantage of this option, simply call your local SSA and speak to a representative. If you are approved, you should receive an acceptance letter in the mail confirming the agreement and notifying you when the payment is due. As long as you send the money in as agreed, the situation should be resolved.

Make Monthly Payments

The Social Security Administration will accept monthly payments, but you must agree to pay the entire balance in full. If you're currently receiving Social Security Disability payments, the agency will withhold your entire check until the overpayment debt is paid off. If you don't get SSD, the agency will calculate your payments so that the debt is paid in full within 12 to 36 months.

However, if you can't afford the monthly payments, you can request they be reduced by submitting the Request for Waiver of Overpayment Recovery or Change in Repayment Rate form. Again, you'll need to provide detailed information about your finances to prove the payments are too much.

File Bankruptcy

Social Security overpayments are dischargeable in bankruptcies. So if you can't pay the money back at all and you don't qualify for a waiver, you can eliminate the debt by filing for chapter 7 bankruptcy. Be aware, though, that the SSA does report delinquent debts to the credit reporting agencies, so your credit score will likely take a major hit.

For more information on handling SSA overpayment debt or assistance with filing for bankruptcy, connect with a social security disability or bankruptcy attorney through resources like http://www.attorneyelkhartin.com.