Following the onset of the Covid-19 pandemic in Massachusetts 2020, hundreds of thousands of Massachusetts residents filed to collect unemployment insurance benefits. In 2020 alone Massachusetts paid out more than $6 billion in unemployment benefits. Now, it turns out, the Commonwealth has determined that tens of thousands of those residents were ineligible to receive some or all of those benefits and are demanding that the money be paid back. In fact, in 2020 alone the Massachusetts Department of Unemployment Assistance (MDUA) determined that over 105,000 Massachusetts residents were overpaid benefits totaling more than $257 million which the MDUA, by law, is entitled to collect.
What Can You Do if You’ve Received a Notice of Unemployment Overpayment?
If you’ve received a notice of unemployment overpayment from the MDUA, the first thing you should do is consider whether you have grounds to appeal. The MDUA will explain the reason for its decision in the notice of overpayment it sends you. If you believe the decision was incorrect, you have 10 days appeal the decision. If your appeal is denied, you may also request a waiver of the overpayment if you are able to show that the reason for the overpayment was based on no fault of your own and that it would cause you a financial hardship or be unfair for you to have to pay it back. If you are unsuccessful on appeal and are denied a waiver, then you will be required to repay the overpayment amount. MDUA may offset future eligible unemployment claims or income tax refunds to satisfy any outstanding overpayments.
What if I Cannot Afford to Pay the Overpayment?
If you’ve been assessed an overpayment and are unable to pay, one option you may consider is personal bankruptcy. Under the Bankruptcy Code, unemployment benefit overpayments are treated just as any other debt and can generally be discharged just like credit cards and medical bills. However, as with all debts, there are exceptions for debts that were incurred by fraud, false pretenses or false statements. For instance, if you were working while continuing to collect benefits, your continuing statements to the MDUA that you were not employed would be considered a false statement that would exempt the debt from being discharged in bankruptcy.
In most cases, an unemployment overpayment debt alone will not warrant filing a personal bankruptcy in Massachusetts. However, if an unemployment overpayment debt is just one on top of many other consumer debts, it may be time to speak with an experienced personal bankruptcy attorney in Massachusetts to determine whether bankruptcy is right for you.
Consult with a Massachusetts Bankruptcy Attorney Today
If you have been assessed a Massachusetts unemployment overpayment you cannot afford to pay or are struggling to pay any other kind of debt, contact the Lipton Law Group at 508 202-0681 for a free consultation today. Our experienced Massachusetts bankruptcy attorneys are here to guide you down the path to financial freedom.