<h2>Lawyer explains how welfare and social security debt and benefits are treated in a New Jersey bankruptcy case.</h2>
In many instances, New Jersey debtors have debts owed to state or federal governmental agencies, that arise out of various public benefit programs. Such benefits include welfare and social security. These debts may arise out of a an obligation to reimburse a specific entity as a result of an over payment which the debtor is required to repay.
Generally, the over payment of welfare and social security debts are “dischargeable” in bankruptcy, which means that the debt may be eliminated. However, the debt will not be “dischargeable” (eliminated), if the bankruptcy court determines that the debt was obtained through fraud. If such fraud was not specifically determined by a court prior to the bankruptcy filing, the bankruptcy court may determine the existence of fraud. The allegation of fraud must be found by way of a lawsuit that is filed in the bankruptcy court. The complaint is called a Complaint for the “Nondischargeability” of Debt.
What happens if the creditor, such as the social security administration, owes the debtor benefits after the bankruptcy discharge? The social security administration cannot hold back $6,000.00 of your future benefits because $6,000.00 was previously discharged in a bankruptcy case.
You may contact Robert Manchel at 866 503 5644 to discuss your NJ. bankruptcy law questions.