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Can I File Bankruptcy For Unemployment Overpayment and Fines Incurred?

Trenton, MI |

My fiancee was let go from his job where he worked for his (now) ex-stepfather. His stepfather said he "would not fight" him on unemployment. His stepfather was never clear on if he was terminated or laid-off. So when my fiancee went to file for unemployment, he said he was laid-off. Everything went through, but a couple months later we received a letter cutting off all benefits, which left me to pay bills on my own. During that time I charged up all of our charge cards and missed payment on a lot of our bills, just to pay rent! The letter also stated we needed to pay back the money they did give us and penalties adding up to over $7200.00!! Now we are considering filing bankruptcy because we cannot repay all our creditors... Is this something we should even consider?

Attorney Answers 3


  1. Sit down with a local attorney. Let him or her know whether there was any fraud involved (that will determine whether the debt can be discharged).

    Mr. Goldstein is a Virginia-licensed attorney only. The information is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. Answering this question does not in any way constitute legal representation. Contacting Mitchell Goldstein or the Goldstein Law Group does not constitute legal representation, nor is any information you provide protected by attorney-client privilege until otherwise advised.


  2. Unemployment overpayments that do not result from fraud are generally dischargeable. To establish fraud, the state has to file an adversary proceeding within 60 days after the 341 meeting. Whether YOU should consider filing bankruptcy is a question that can only be answered by a Michigan attorney who understands everything about your situation.


  3. The State would have to file an adversary in your case and claim that the unemployment benefits were paid to your husband based upon fraud. It does not sould like the typical fraud case where the debtor collects unemployment while they are employed. Under the facts you recited I think the State would have a hard time proving fraud. Unless the State can prove fraud any claim of overpayment of the benefits will be discharged.

    The answer above is for general information purposes only. You should talk to an attorney to determine your specific legal rights.

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