Identification Number:
GN 02215 TN 41
Intended Audience:See Transmittal Sheet
Originating Office:ORDP OISP
Title:Methods of Recovery for Title II, Title XVI, and Title XVIII Overpayments - Part II
Type:POMS Transmittals
Program:All Programs
Link To Reference:
 

PROGRAM OPERATIONS MANUAL SYSTEM
Part GN – General
Chapter 022 – Overpayments
Subchapter 15 – Methods of Recovery for Title II, Title XVI, and Title XVIII Overpayments - Part II
Transmittal No. 41, 04/19/2022

Audience

PSC: BA, CCRE, CS, DCR, DS, LDCR, LDS, PETE, RECONR, SCPS, TSA, TST;
OCO-OEIO: BTE, CR, EIE, FCR, PETL, RECONR, RECOVR;
OCO-ODO: BTE, CST, CTE, CTE TE, PAS, PETE, PETL, RCOVTA, RECOVR;
FO/TSC: CS, CS TII, CS TXVI, CSR, CTE, DRT, FR, OA, OS, RR, TA, TSC-CSR;

Originating Component

OISP

Effective Date

Upon Receipt

Background

We revised this transmittal to update the writing style, terminology, and processing instructions as this transmittal has not been updated since 1997.

 

Summary of Changes

GN 02215.196 Objection to a Discharge in a Chapter 7 Bankruptcy - PC Procedure

We updated the heading and hyper linked to the bankruptcy code.

Subsection A: We updated the heading. We revised the sentence for clarity and to include where to find the date of the meeting of creditors.

Subsection B: We updated the heading; revised the instructions to differentiate between when OIG made a fraud determination, SSA made a similar fault determination, and when there is no fraud or similar fault determination; and explained misrepresentation.

Subsection C: We updated the heading and clarified the instructions for submitting the request to the Regional Chief Counsel (RCC).

Subsection D: We created this new sub-section to add an example of the referral language to the RCC.

GN 02215.196 Objection to a Chapter 7 Bankruptcy Discharge

CITATIONS:

Bankruptcy code, 11 U.S.C. Sections 523(a)(2)(A), 1224, 1324, 1325(a)(3) and 1325(a)(4).

A. Time limitation

In general, if SSA needs to file a complaint to determine discharge of a debt under Chapter 7, the complaint must be filed with the bankruptcy court within 60 days from the first meeting of creditors. You can find this date on the bankruptcy petition.

B. Reasons to object to a discharge order

1. OIG made a fraud determination or SSA made a similar fault determination

Send a referral to the Regional Chief Counsel (RCC) for possible objection to a Chapter 7 bankruptcy discharge order when an overpayment resulted from fraud or similar fault, whether the U.S. Attorney's Office (USAO) prosecuted the debtor or not and when SSA determined similar fault. This includes cases where the:

  • USAO prosecuted the debtor,

  • USAO did not prosecute the debtor,

  • There is a court ordered restitution, or

  • SSA determined similar fault.

If the debt is for a Civil Monetary Penalty (CMP), send a referral to the RCC. Check the debtor's record or file for a CMP debt reason and any fraud or similar fault indicators or documentation.

2. OIG or SSA did not make a fraud or similar fault determination

Absent a fraud or similar fault determination from OIG or SSA, use the following guidelines to determine if you should refer to the RCC for misrepresentation:

  • The debtor caused the overpayment by their false representation;

  • The debtor intended to deceive SSA by failing their reporting responsibilities; or

  • SSA actually and reasonably relied upon the misrepresentation to its detriment by continuing to make benefit payments.

Examples of "misrepresentation" include 1) omission, and 2) affirmative act. Watch closely for evidence of "misrepresentations," which can include a number of different forms such as:

  • Omission: John Doe completed a trial work period, and their employer raised their salary well above substantial gainful activity (SGA). John continued working and failed to report his salary increase.

  • Affirmative Act: John Doe told the agency that they were no longer able to work, when in fact, they never stopped working; or they started a new job without reporting the change of job status to the agency.

C. Submitting the request to the RCC

In all Chapter 7 situations (including no asset cases) where the debt is $3,000 or more, review the debt specifics and the debtor's file for possible referral to the RCC to consider filing an objection to discharge.

Be prepared to provide additional information and to work with the assigned attorney.

If the debt(s) meets the guidelines in GN 02215.196B., proceed as follows:

  • Forward a copy of the bankruptcy notice (if possible, highlight the last day for objecting to discharge), by email, to the Chief Counsel;

  • Briefly explain how the debt(s) occurred, the amount(s) of the debt(s) and any adjustment or refund actions;

  • Advise the Chief Counsel if adjustment was stopped as a result of the bankruptcy notice and whether fraud was determined or misrepresentation is involved;

  • Explain the basis of the misrepresentation (e.g. debtor returned to work but failed to report); and

  • Indicate as soon as possible if a Proof of Claim has been or will be filed (see GN 02215.195G).

If an objection to discharge must be received by the court within 15 working days after the PC learns of the bankruptcy proceeding or the time within which an objection should have been filed has expired, contact the RCC's office and explain the situation. If appropriate, the RCC may be able to file an extension request with the court.

D. Referral language example

Below is an example of the wording you may use in the referral email to the RCC:

"Northern District of Illinois - Ramona Jones (000-00-0000 A) - Objection to Discharge

The Social Security debt occurred because Ramona Jones failed to timely report that they no longer had a child in their care for the period of October 2012 to September 2018, the current debt balance is $22,352. SSA discovered this and suspended their benefits. Any change with the child's living arrangements should be reported. SSA's records show that Ramona Jones had no child in care from October 2012 to September 2018 and Ramona was not due benefit payments during this period. The overpayment totaled $22,352.

Ramona received their reporting responsibilities annually. They did not file a waiver when notified of the overpayment and there was no OIG investigation in connection with the overpayment.

Thank you."

 


GN 02215 TN 41 - Methods of Recovery for Title II, Title XVI, and Title XVIII Overpayments - Part II - 4/19/2022