TN 23 (02-08)
GN 02215.190 Debtor Involved in Bankruptcy Proceedings - FO Procedure
SSA is subject to contempt citations if collection efforts occur after bankruptcy notification. Consequently, whenever the FO receives notice of a bankruptcy proceeding immediate action must always be taken.
1. Receiving notice
Upon receipt of notice of bankruptcy proceedings, immediately determine (via. MBR, ROAR, and SSR queries) the nature of the debt (title II, title XVI) and whether more than one overpayment exists.
Effective December 1, 2003, bankruptcy courts implemented a new procedure whereby initial bankruptcy notices sent to creditors bear the debtor’s full SSN. Any subsequent bankruptcy documents (discharges, motions, etc) will only have the last 4 digits of the SSN. If the material received does not have the full SSN, check the Public Access to Court Electronic Records (PACER); see GN 03930.091A.2. If the full SSN is not there, attempt to obtain it by using any or all of the following sources:
If the full SSN is obtained but the MBR/ROAR/SSR queries result in a “NIF,” query the Master Representative Payee File (MRPF) to determine if the debtor may be a payee for an individual with an existing overpayment. You can obtain the SSN on which an overpayment may exist.
a. Chapter 7
If a Chapter 7 notice is received from the court, assume that SSA has been listed as a creditor. If aware of a Chapter 7 filing by other than a notice from the court, verify the filing via PACER and obtain a copy of the notice of bankruptcy proceedings. Since the automatic stay in a Chapter 7 bankruptcy prohibits the collection of any debt that arose before the filing of the petition, stop recovery of all overpayments received by the debtor before the date the bankruptcy petition was filed (GN 02215.185C.1.b.). Stop recovery efforts in accordance with GN 02215.185B.2..
b. Chapter 13 or 12
If a Chapter 13 (or 12) notice is received, stop recovery for any debt(s) that arose before the filing of the bankruptcy petition in accordance with GN 02215.185B.2., and
If a copy of the wage earner or farmer plan is not included with the petition, use PACER to ascertain the length of the plan (i.e., 3 or 5 years) and
If multiple debts, check PACER to see which debt(s) is listed on the bankruptcy petition.
If aware of a Chapter 13 (or 12) bankruptcy filing by other than a notice from the court, contact the interim trustee (if known) or court to ascertain whether or not SSA is listed as a creditor and the specific SSA debt involved. Request a copy of the notice of bankruptcy proceedings including a copy of the wage earner plan.
2. Stopping recovery and notifying PC/RO
a. Title XVI overpayment
Stop efforts to obtain refund and, if appropriate, adjustment actions (SI 02220.040B).
Forward the notice to the ARC, MOS with the following information:
The date that the 60-day period after the first creditor's meeting will expire, and
The date when the 180-day time period for filing a proof of claim will expire, and
Any title II identified and the PC involved.
b. Title II overpayment
Stop recovery efforts and input the Record Bankruptcy Petition (DFBP) screen in DMS with a Proof of Claim code of “3,” see MSOM DMS 007.006.
Alert the PC to the bankruptcy filing. Advise the PC of the following:
The type of bankruptcy (e.g., Chapter 7, 12 or 13);
If Chapter 7, whether or not the notice precludes filing a proof of claim;
If Chapter 13 (or 12), whether or not SSA is a creditor and, if so, the specific SSA debt involved and the length of the plan;
The date that the 60-day period after the first creditor's meeting will expire;
The date that the 180-day period for filing a Proof of Claim (GN 02215.185C.5.) will expire;
The bankruptcy case number; and
The name of the bankruptcy judge;
Any title XVI debt brought to the attention of the RO.
Fax the bankruptcy notice to the paperless folder in the appropriate PC. Also fax the bankruptcy notice to NDRed or eDIB as appropriate.
Annotate the DMS remarks with the same information regarding the bankruptcy filing. Follow regional instructions regarding sending the bankruptcy filing information to your regional office.
3. Expediting handling
If the 180-day time period for filing a Proof of Claim (GN 02215.185B.5.) will soon expire or has already expired, proceed as follows:
Call the ARC, MOS the same day the notice is received, and
Send a copy of the notice and a current MBR or SSR if title XVI, to the Chief Counsel through ARC, MOS, Attention: Center for Programs Support. Advise the Chief Counsel of the action being taken and by whom (e.g., petition will be sent to GLPSC for proof of claim); and
Advise the PC of these actions when forwarding the notice of bankruptcy to the PC.