Overpayment Recovery in Bankruptcy cases

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  • #21273
    Anonymous
    Guest

    There seem to be contradictions in everything I read about this subject. In words of one syllable, could someone please provide the definitive answers here!

    (a) Where a Bankruptcy Order has been made, can recovery by clawback from HB be applied to overpayments raised before the date of the order?

    (b) In pre-bankruptcy cases, are all other forms of recovery barred?

    (c) For overpayments raised after the date of the order, are all forms of recovery permitted?

    #4896
    steveg
    Participant

    I’ve been having the same trouble as you! In fact on Friday I spent all afternoon going through the Balding case and trying to apply it to one of my bankruptcy claims.

    In answer to your questions:

    A) You can recover an overpayment by clawback up until the time that the bankruptcy has been discharged. Then the remaining balance can no longer be recovered as it would be part of the bankruptcy UNLESS the overpayment was fraudulent, then the overpayment is not part of the bankruptcy and so can continue to be recovered.

    B) I’m not sure if all methods of recovery are barred but in our case we applied for a Court Order and the court refused. However as our claimant’s bankruptcy hasn’t been discharged yet we can

    C) This is where it gets confusing… According to the Balding case (and the Steele case for that matter) There are 4 scenarios regaring overpayments and bankruptcy:

    1. Benefit award, payment and overpayment decision made pre-bankruptcy. Overpayments can be recovered up to the point of discharge then must be included in the bankruptcy UNLESS its a fraudulent overpayment in which case it can still be recovered.

    2. Benefit award and payment made pre-bankruptcy; overpayment decision made post bankruptcy. Overpayments can be recovered up to the point of discharged then must be included in the bankruptcy UNLESS its a fraudulent overpayment in which case it can still be recovered.

    3. Benefit awarded pre-bankruptcy; benefit paid post-bankruptcy and overpayment decision also post-bankruptcy. Overpayments are not part of bankrupcty and so can still be recovered by whatever means.

    4. Benefits awarded, paid and overpayment decision made post-bankruptcy. Overpayments are not part of bankruptcy and so can still be recovered by whatever means.

    Hope this helps

    #4897
    Anonymous
    Guest

    That’s great, Steve – the definitive answer I wanted! Thanks very much!

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