Unemployment Benefits Overpayment
Did you receive a bill for unemployment benefits overpayment? Overpayment of unemployment benefits is dischargeable in bankruptcy. If the EDD or Employment Development Department sends you a bill claiming you owe them money for them paying you too much contact us. Call us toll free at 1-877-963-9543 to schedule a FREE PHONE CONSULTATION or FREE OFFICE CONSULTATION to find out if bankruptcy is right for you.
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Bankruptcy will discharge the debt owed to the EDD under most circumstances. The most common reason why an overpayment of benefits is not discharged is because fraud is committed or you are still receiving payments from the EDD.
If you are still receiving benefits then they monthly amount will just be reduced until the debt is paid in full. This is called recoupment. They will just recoup the loss from what you are supposed to get in future payments. The automatic stay when filing bankruptcy will not be able to stop the recoupment either.
If you have lied to the EDD to qualify for benefits or continued to receive benefits when you were not eligible this can be determined to be fraud and criminal charges could be filed against. So not only will you have to pay the EDD back, but you may have a criminal conviction entered against you. Debts incurred due to fraud are not dischargeable in bankruptcy.
If you just were paid too much and it was the EDD’s fault they will still want the money they should not have paid you back. The largest problem with this is that you probably have already spent the money. After all, you were most likely not working and needed the money to eat and live at the time you received it. This is when bankruptcy can discharge the debt owed just like a credit card or medical debt.
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