Just got FEMA recoupment letter

[JackBondLove]

Evidently FEMA claims that a mistake had been made when I was given disaster assistance after Hurricane Katrina (about $3K), and commands me to refund the money. I am going to go through the full appeal process irregardless, but it seems to me that the debt due to recoupment for improper disbursements would have been instigated at the time of that disbursement, and not at the time that FEMA decided after review the case and send me a letter stating that there is this debt - which since FEMA last disbursed money to me in 2008, and I filed for, and received a complete and general discharge in 2010, should mean that this debt would be discharged as any debt to the federal government (but still subject to certain offset procedures that I am aware of, and that I plan to get a complete run-down of from my senator.)

I was told from one low level staff member at FEMA that I need to file a motion in BK court (which I would do pro se of course), and will be speaking with a competent counselor (has the expertise in BK issues) at FEMA on Monday.

What do you all think?

[despritfreya]

While I have not dealt with FEMA issues, I tend to agree with your assessment. The overpayment is pre petition and, assuming you were a "no asset" case and no "fraud" was involved, is subject to your Discharge. If you were an asset case then you do have a problem.

Assuming there were no assets and the overpayment was not the result of some fraudulent type conduct on your part, I would send a nice letter and a copy of the Discharge to FEMA. In your letter cite to 11 USC 523(a)(3) in that this debt does not fall within the type of debts referenced in that provision that fall outside of the discharge. I see no reason to reopen your case.

Des.

[JackBondLove]

While I have not dealt with FEMA issues, I tend to agree with your assessment. The overpayment is pre petition and, assuming you were a "no asset" case and no "fraud" was involved, is subject to your Discharge. If you were an asset case then you do have a problem.

Assuming there were no assets and the overpayment was not the result of some fraudulent type conduct on your part, I would send a nice letter and a copy of the Discharge to FEMA. In your letter cite to 11 USC 523(a)(3) in that this debt does not fall within the type of debts referenced in that provision that fall outside of the discharge. I see no reason to reopen your case.

Des.

Why would there be an issue if there were assets? FEMA did not stake their claim when I filed, so they lose. And in any case, the federal government does not pursue asset claims (I defaulted on an SBA loan, and they did not stake their claim of the 3% recovery from my assets.)

[despritfreya]

Why would there be an issue if there were assets? FEMA did not stake their claim when I filed

You miss the point - or maybe I misunderstood. FEMA was not listed as a creditor and therefore was not aware of the bk. Or was it?

If your case was an asset case - meaning the Court issued a notice to creditors that they must file claims by a date certain - a creditor must have had the opportunity to file a timely claim. If the creditor was not aware of the bk in time to file a claim it's debt is excepted from the Discharge pursuant to 523(a)(3). The fact that the SBA did not file a claim is not relevant. So, the questions is, "was your case an asset case"?

Assuming FEMA was not listed because you did not know you had been overpaid and further assuming you were an asset case, maybe you could reopen the case and ask the Court, based upon some equitable argument, that the obligation be included in the discharged despite the inability of the creditor to seek a disbursement from the Trustee. I do not know such would work as I have never attempting this for any client.

Of course, all of this becomes moot if you were not an asset case.

Des.

[JackBondLove]

Assuming FEMA was not listed because you did not know you had been overpaid and further assuming you were an asset case, maybe you could reopen the case and ask the Court, based upon some equitable argument, that the obligation be included in the discharged despite the inability of the creditor to seek a disbursement from the Trustee. I do not know such would work as I have never attempting this for any client.

This is exactly the case. I did not know I was a debtor to FEMA because FEMA did not inform me. And in any case, it seems that the only way a creditor can claim that the debt is non-dischargeable is *maybe* if the debtor knew about the debt but explicitly did not list it in the filing. So long as the debtor can plausibly say that he did not know about a debt, the general discharge covers any debt that would not be listed.

The non-competent representative told me I would need to file something with the BK court to ask that this debt be included (of course, she was just speculating.) I just can't believe that a government agency would be recalcitrant about the debt being discharged - there is no profit motive, only the properly following of the law.

[JackBondLove]

An update. Just talked with the BK expert at FEMA. All he needs is a copy for the discharge order, and the recoupment goes away. He even said that there would be no offsets in the future (e.g., tax refunds, Social Security, etc.), for which I am going to get a definitive answer on that and my defaulted SBA loan, via my Congressman.

[despritfreya]

An update. Just talked with the BK expert at FEMA. All he needs is a copy for the discharge order, and the recoupment goes away.. . .

That is absolutely wonderful news. My recommendation is to somehow get FEMA to acknowledge the discharge in writing. You never know when such will become handy to have.

Des.

[GoingDown]

Yes, get it in writing if possible.

You may need it later on.