As the pandemic swept across the US, millions of Americans turned to unemployment as they were laid off. For a time, unemployment payments helped them make ends meet and put food on the table. However, for a rising number of citizens, states are now demanding some of the money paid out in unemployment benefits to be repaid. If you find yourself in this situation, there is hope – a new bankruptcy in Nevada may be a viable solution.
What’s the Situation?
While the specifics vary from family to family, millions of American families find themselves facing similar situations – unemployment benefits were paid to them, but now the state is demanding their repayment, often in addition to fees and fines.
ABC News gives us the story of a couple who found themselves in just this scenario. They applied with the unemployment office in Florida, and after weeks of waiting, during which time they faced increasing hardship, the state finally approved them for benefits. Then, one of them was lucky enough to be hired for a new job.
The couple updated their unemployment account online and even called the unemployment office to let them know about it. However, unemployment benefits continued to be added to the account. The couple simply assumed that those were retroactive payments because of the lengthy wait after applying and thought nothing more about it.
Until they received an overpayment notice demanding that the money be repaid, that is.
The couple, though stunned, submitted a small payment to send more later. The notice did not include any mention of a minimum payment required, after all. Imagine their surprise when they received a letter adding another $120 in collection fees to the almost $700 the state was already demanding.
That situation is playing itself out all over the nation due to glitches, slow mail processing, and other problems. It results in serious hardships for American families, damaged credit, and increased financial strain at a time when most people can least afford it.
How Is the Debt Repaid?
In most cases, the state allows debtors to make payments on their debt. However, many people are unaware that they owe the debt in the first place. In addition, challenging financial times make it even harder for people to find additional funds to repay a debt they did not realize they had incurred.
One possible path forward is to ask for a waiver. If you believe that the debt is inaccurate, or the overpayment was due to an error, it may be possible to have the debt waived. You can also file an appeal with the state and present evidence supporting your claims in an informal hearing with a judge.
A Solution to the Problem
There is a solution to the unemployment overpayment problem – a new bankruptcy filing. Nevada courts (and courts throughout the rest of the country) allow debtors to discharge unemployment overpayment through bankruptcy, just like many other forms of debt. However, understand that if you obtained overpayment of unemployment benefits fraudulently, that debt cannot be discharged through bankruptcy. Also, there is a chance that the state will claim fraud in an attempt to block the discharge of this debt.
Bankruptcy is a challenging process at the best of times. Add in an attempt to discharge unemployment overpayments, and things become even more challenging. If you’re facing this situation, you don’t have to go it alone. Contact us today to schedule a consultation on your case – we can help you understand your options and provide the legal guidance and representation you deserve.
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