Many people often receive unemployment benefits during their time of unemployment. Many individuals rely on these payments to pay their bills. It is not uncommon for people receiving unemployment to find out they have been over-paid or overcompensated. Often times, individuals will receive a letter stating that they received too much money and the money must be paid back. Essentially this letter say the State has overpaid you and it wants its money back.
Overpayments can happen through no fault of your own. Unfortunately, it doesn’t matter whether it was the State’s fault or not, the recipient is still legally obligated to repay the money. If the money isn’t repaid, the Department of Revenue can enforce their right to collect on this debt by garnishing wages, placing liens on a property, or taking tax refunds.
If you owe the Department of Revenue for unemployment overpayment you may be wondering if this debt can be discharged in bankruptcy? The good news is that debts owed for unemployment compensation can be discharged in bankruptcy. Whether a person files a chapter 7 or a chapter 13 bankruptcy that debt is discharged like any other unsecured debt. However, the Department of Revenue does have the legal right to deny future benefits if the overpayment isn’t paid. So, even though the debt is discharged, your future benefits could be affected if there is an outstanding balance.
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If you are dealing with an overwhelming debt problem, it is important to discuss your options with a bankruptcy attorney. If you have questions about bankruptcy and would like to do a free consultation to go over your options, visit www.lifebacklaw.com to speak with an attorney. You will be glad you did!
