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Social Security SSDI - MY SSDI attorney overcharged me. No cap on the 25% percentage fee on the fee agreement I signed.

Seattle, WA |

I thought the max a representative would be paid if your case was won was $6000. I just received my award letter and it states 25% was withheld from my backpay to pay attorney's fees. The amount that was withheld is close to $13000 and that is not counting the amount that is going to be withheld from my son's benefits. I applied for my son's benefits on Dec 27th so his benefits & backpay would come in Jan for tax purposes. Thanks in advance for your help.
I found my fee agreement papers and it states:
"IF YOU GET MONEY FROM THE SSA, YOU WILL PAY US WHATEVER IS BIGGER: $2,000 or TWENTY-FIVE (25%) PERCENT OF THE PAST-DUE BENEFITS TO YOU AND YOUR FAMILY BECAUSE OF YOUR AWARD."
Is this even legal? The SSA reviews these things to ensure it meets their guidelines. Do I have any recourse?

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Attorney answers 6

Posted

If you agreed to the amount then the atty can ask the Judge to approve the agreed amount. You can write the Judge to object.

The information you obtain from this website is not legal advice.

Posted

Speak directly with your lawyer about this. You can also speak directly with SSA either by calling them or making an appointment and going to the SSA office and discussing it with them there. Lawyers know full well about the $6,000 cap, so it sounds as though there may well be something else for which funds were withheld. The lawyer didn't overcharge you as s/he is being paid through funds withheld by SSA, and they will not overpay him or her--SSA enforces that $6,000 cap.

Not legal advice, just my two cents. Consult local counsel for legal advice tailored to your specific circumstance. I practice in Vermont ONLY.

Posted

There are regulatory caps for the amounts charged by Social Security attorneys, which is 25% of back pay or $6,000, which ever is less. Typically, Social Security withholds the payments and submits them to your attorney. IF Social Security withheld $13,000.00, you can petition them to reimburse you due to the overpayment to your attorney. You can also petition the WA bar association for assistance if you feel that the fee withheld or charged was unreasonable. Prior to doing any of this, I would suggest contacting the actual attorney IN WRITING, expressing your concerns, and asking that your case be credited the additional $7k that was taken.

This comment is provided for informational purposes only, and is not to be considered legal advice and/or the establishment of an attorney/client relationship.

Dianna Cannon

Dianna Cannon

Posted

The attorney fees charged in Social Security cases are governed by regulation and must be approved by the judge in your case, whether or not your attorney elects to charge you using a fee agreement or fee petition method. You should speak to your attorney and determine what you attorney is going to charge. Typically, the charge should not exceed $6000, but there are cases where the attorney can request more - for example, if your case has been to the Appeals Council or Federal Court. Just because Social Security withheld $13,000, does not mean that your attorney will actually collect that amount in attorney fees.

Posted

First, the fee agreement is legal. It is called a minimum fee agreement - in the event you win there is a minimum fee of $2000. This is often used in cases where a claimant gets workers comp benefits that might reduce SS benefits.

Second - lawyers have an option - they can use the fee agreement with a $6000 cap, or use a fee agreement with no cap. With no cap, they have to file written fee request with the Judge.

There are some facts missing here. Even the "cap" fee agreements state that if more than one hearing is involved, of if appeals to federal Court or the appeals Council are involved, then the fee would be 25% - not the $6000 cap. so, if either of these circumstances apply, that may explain what is happening.

The fact that $13000 was withheld does not mean the attorney will request the whole amount. If he does, and he did not spend too much time on your case, then your recourse is to file a written objection to the fee request with the office at SSA where the case was decided - probably the Judge.

Talk to your accountant about amending prior year tax returns - the money you receive all at once was for earlier years and if you amend earlier year tax returns, your tax liability may be reduced.

Hope that helps. Good luck to you!

The exact answers to questions like this require more information than presented. The answer(s) provided should be considered general information. The information provided by this is general advice, and is not legal advice. Viewing this information is not intended to create, and does not constitute, an attorney-client relationship. It is intended to educate the reader and a more definite answer should be based on a consultation with a lawyer. You should not take any action that might affect your claim without first seeking the professional opinion of an attorney. You should consult an attorney who can can ask all the appropriate questions and give legal advice based on the exact facts of your situation. The general information provided here does not create an attorney-client relationship.

Posted

At this time, Social Security is withholding 25% until they review your attorney's fee petition. If the fee petition asks for the entire amount, you will get a letter from Social Security explaining how you may object to the amount. You may also contact your attorney to work out an agreeable fee. I urge you to contact your attorney first to work something out. Communication is critical and I am confident your attorney will discuss an amicable resolution with you.

Posted

Mr. Farrell is completely correct. The $6,000 "cap" isn't really a cap at all, it's just a cap if the attorney wants to get paid easily and quickly, without having to explain himself. Even 25% isn't a cap, when you read the law. Subject to whatever agreement he makes with his client at the beginning, an attorney can petition for any amount from the Agency - even more than $6,000, even more than 25%. In practice, most people follow the $6,000 cap because they want to get paid without filing a petition. Most people also limit their petitions to no more than 25%, because that's all the Agency is going to hold for direct payment. Those are just questions about how easy it is to get paid, though, not what's legal or permissible.

That said, please talk to your attorney about this. You do have the right to object to whatever fee petition he files, if you disagree with it, but it would be much better for everyone if you could all agree on a reasonable fee. Then he can file his fee petition, with your support, and the faster it's granted, the faster the Agency is allowed to release the remainder of the 25% they're currently withholding, if any is left after his fee. If you and your attorney get into a fight over it, the Agency is supposed to hold all of that money until the fee petition issue is resolved.

Jeremy Bordelon is a licensed attorney in the State of Tennessee only, and is authorized to practice in all Tennessee State and Federal courts, and before the Social Security Administration in any jurisdiction. The answers provided on Avvo.com are for information purposes only, and should not be relied on as legal advice. This answer does not create an attorney-client relationship between us. In some jurisdictions, this answer may be construed as attorney advertising.

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