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Unemployment Overpayments

Yes, unemployment overpayments are dischargeable in bankruptcy if there is no fraud involved. 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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Adding injury to insult is the letter received in the mail from the EDD informing you that you somehow owe them money. How can this be true? You received benefits from them because you needed the money to eat and live while you looked for work or other reasons. Now that you have accepted the money and spent it the EDD now says, “Oops, we made a mistake and you now have to give some of that money back.” Not a good day. The good news is that a debt owed to the Employment Development Department is dischargeable when filing bankruptcy as long as no fraud is involved.

If you collected benefits and you were no eligible because you were actually working or some other reason, there will probably be a problem. You cannot discharge an overpayment of benefits if you have committed fraud or lied to obtain the benefits. Debts incurred by fraud are not dischargeable when filing bankruptcy. You may also be charged criminally for obtaining benefits through fraud.

If there is fraud involved the debt will most likely not be discharged. Debts incurred as a result of fraud are not dischargeable when filing for bankruptcy protection under any chapter of the bankruptcy code.

If you are still receiving money each month from the EDD, then they can also reduce the monthly payment to you to take the money back. So if you were receiving $1,000 a month they will reduce it to $600 and use the other $400 to pay themselves back. Bankruptcy will not stop the recoupment of the money in this manner. For more information about how bankruptcy can help get rid of unmanageable debts contact us toll free and schedule a free consultation today. You deserve a fresh start.

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