Setoff or recoupment? Courts apply different tests

Trial Notebook

By Steven P. Garmisa

Hoey & Farina

Posted March 10, 2021 11:47 AM

For Grace Logan — a widow in her 60s who has asthma, can’t work and is trying to survive on food stamps, $90 a month from a private pension and $828 in monthly social security benefits — the distinction between “setoffs” and “recoupment” was crucial when she petitioned for Chapter 13 bankruptcy protection and the Social Security Administration jumped in with a “recoupment motion,” claiming it was entitled to completely halt her benefits until it was fully reimbursed for $36,124 in wrongfully received payments.For several …

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