Berg v. Social Security Administration

Case Type:
Case Status:
17-2389 (7th Circuit, Aug 17,2018) Published
Seventh Circuit affirmed order of bankruptcy court concluding Social Security Administration (“SSA”) could setoff $17,385 in the debtor’s account. The agency, however, was required under § 553(b)(1) to return $2,015 pertaining to the setoff of pre-petition obligations that accrued during the ninety-day period before the debtor filed her bankruptcy petition.
Procedural context:
Appeal to the Seventh Circuit from order of bankruptcy court allowing SSA to setoff $17,385 under § 553(a).
Debtor started receiving social security benefits for disability in 1994. She informed SSA she returned to work in 2002. Nevertheless, SSA continued to pay her until December 2003. An administrative law judge determined SSA overpaid the debtor $25,690 and ordered her to repay the agency in monthly installments of $300. Debtor stopped working again in November 2012. In 2014, SSA granted her new application as of May 2013. Debtor accumulated $20,307 in benefits from May 2013 through July 2014. But because she still owed SSA $19,400, the agency off set the debt and sent the debtor a check for $907. Debtor filed for bankruptcy relief on August 7, 2014. She then filed a complaint against SSA seeking recovery of the setoff under §§ 553(b) and 522(h). Bankruptcy court ruled SSA could setoff its claim for $17,385. Debtor appealed.

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