Tag: setoff

Bankr. E.D.N.C.: In re Goodman- Setoff of Social Security Funds

Summary:

In December 2010, the Social Security Administration the Debtor of an alleged overpayment of SSI benefits, seeking repayment of $11,585. In March 2011, the Debtor received a “Notice of Award” for Social Security Disability (“SSD”) benefits of $1,001.00 beginning March 2011. Also in March 2011, the Debtor was notified of SSA’s decision that she was entitled to receive a monthly payment of $674.00 and retroactive SSI benefits from May 2010 through March 2011 totaling $7,414.00. Then on March 24, 2011, SSA intercepted the debtor’s $7,414.00 in retroactive SSI benefits, which it applied toward the $11,585.00 overpayment. The Debtor filed bankruptcy on April 7, 2011, and subsequently sought turnover of the $7,414.00 seized within 90 days of the filing of her petition.… Read More

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Bankr. E.D.N.C.: In re McGarry- Requirements for Setoff

Summary:

The Debtor was entitled to one-half of her ex-husband’s military retirement, but was also liable for one of their children’s student loan debts. The Debtor was in default on such payments and her ex-husband paid $4,183.07 on that debt. The property settlement required the Debtor to indemnify her ex-husband for payments on the student loan debt.

11 U.S.C. § 553(a) of the Bankruptcy Code recognizes a creditor’s right to “offset a mutual
debt owing by such creditor to the debtor that arose before the commencement of the case under
this title against a claim of such creditor against the debtor that arose before the commencement
of the case”, recognizing setoff rights existing under applicable state or federal law, without creating new setoff rights.… Read More

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