Posted by NCBRC - March 15th, 2018
The SSA’s withholding of benefits from one program to recover fraudulently-obtained payments made under a separate program was not a “recoupment” free from the strictures of the automatic stay. U.S.A. v. Johnson, No. 17-5224 (N.D. Ill. March 12, 2018).
For more than three years John Johnson fraudulently received retirement social security benefits. Upon learning of the fraud, the SSA calculated that he owed almost $58,000 in ill-gotten benefits and penalties and began withholding his legitimate disability benefits. Mr. Johnson filed for chapter 13 bankruptcy and argued that the SSA’s withholding of his disability benefits violated the automatic stay. The bankruptcy court agreed and the SSA appealed. Read More
Posted by NCBRC - November 30th, 2017
Advanced sick leave created a debt in bankruptcy that was subject to recoupment by the creditor/employer. Patterson v. Social Security Administration, No. 14-65877, Adv. Proc. No. 15-5129 (Bankr. N.D. Ga. Oct. 5, 2017).
Chapter 7 debtor, Tyree Patterson, worked for the Social Security Administration. The SSA had a policy whereby an employee who has exhausted his sick leave can “borrow” against future sick leave and “repay” the borrowed days with later-accrued sick leave. After Mr. Patterson obtained his discharge in bankruptcy, the SSA “collected” on his pre-petition advanced sick leave by reducing his newly accrued sick leave. Mr. Patterson reopened his bankruptcy to complain that the SSA’s conduct violated the discharge injunction. Read More
Posted by NCBRC - June 14th, 2016
Finding no logical relationship between the debtor’s obligation to repay pre-petition overpayments and her entitlement to future social security benefits, a bankruptcy court in the eastern district of California denied the Social Security Administration’s request for recoupment. United States v. Angwin, No. 15-11120, Adv. Proc. No. 15-1080 (Bankr. E.D. Cal. April 5, 2016). Read More
