Overpayment Debts in Bankruptcy

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    I’ve read and understood (finally I think) that it’s significant what dates the benefit award, payment and overpayment decision are made in relation to the date of bankruptcy, in determining method of recovery (if any). However, I’m a bit confused by the Guidance Manual’s mention of debts being included/not included in the bankruptcy order.

    My intepretation from recent posts and the related caselaw is that the various dates are relevant in establishing whether or not a debt is ‘part’ of the bankruptcy order and thus how the debt should be treated before and after discharge, but the GM seems to suggest that dates are irrelevant and that if “the LA debt is not included in the order as a registered creditor” then any form of recovery can take place….is this the case?

    What makes a debt ‘part’ of the order – is it the detail of the order itself as provided by the court, or the date of the debt in relation to the date of the bankruptcy?

    I hope this makes sense 😳


    Hi Lu,

    I personally don’t take much notice of the guidance manual – in this instance the DWP would want all recoverable o/ps to be recovered even if the debtor is bankrupt because its in their best interests.

    However the STEELE & BALDING cases have legal standing whereas the guidance manual doesn’t.

    Based on the judgements I look at which of the 4 scenerios quoted in the BALDING case relates to the overpayment. Once that’s established then I decide whether to refer for write-off. One thing to remember is that all fraudulent o/ps are exempt from bankruptcy.

    Hope this helps.

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