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Anastasia Sokolov

EDD took money after bankruptcy discharge - can I get my overpayment funds back?

So I'm in a weird situation with EDD and need advice from anyone who's dealt with something similar. I had an overpayment marked as 'fraud' (long story, wasn't intentional) that EDD recouped from my unemployment benefits in January 2025. The problem is, this debt was actually discharged in my Chapter 7 bankruptcy the month before! I know typically fraud-related overpayments aren't dischargeable in bankruptcy, BUT here's the thing - EDD was properly listed as a creditor in my filing, they were notified through the court, and they never filed an objection during the bankruptcy proceedings. I just put two and two together last week and realized they took about $4,800 from my benefits that I technically don't owe anymore according to the bankruptcy discharge. I've already submitted appeal paperwork, but I'm wondering if anyone has experience with this? Will EDD actually return money they recouped for a debt that was legally discharged? The timing seems important here since they took the money AFTER the discharge was finalized.

Sean O'Connor

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Whoa, this is a tricky situation! I went through Chapter 7 last year but didn't have any EDD issues. From what I understand, you're right that normally fraud-related overpayments aren't dischargeable, but if EDD didn't object during your bankruptcy proceedings, that might change things. Did your bankruptcy attorney mention anything specific about the EDD debt?

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My attorney basically said that since EDD didn't object or file an adversary proceeding to contest the discharge, the debt should be considered discharged with everything else. But he's not an EDD specialist, which is why I'm trying to find someone who's actually gone through this exact situation.

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Zara Ahmed

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I work in legal assistance (not a lawyer though) and have seen similar cases. Based on my experience, you're in a potentially strong position. When a creditor receives proper notice of bankruptcy and fails to object to the discharge of a debt that would normally be non-dischargeable (like fraud-related overpayments), courts have sometimes ruled in favor of the debtor. The technical term is "discharge by procedural default." Your appeal should focus on: 1. Evidence that EDD was properly listed as a creditor 2. Proof they received notification of the bankruptcy 3. Documentation showing they didn't object during the proceedings 4. A copy of your discharge papers EDD should return the money if your appeal clearly demonstrates these points. The recoupment after discharge could potentially be viewed as a violation of the discharge injunction.

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This is incredibly helpful, thank you! I do have all that documentation. My bankruptcy attorney included EDD on the creditor list with their specific bankruptcy address, and I have the certificate of service showing they were notified. I'll definitely include all of that with my appeal.

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Luca Conti

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EDD doesnt care about your bankruptcy!! They took my cousins tax refund even after bankruptcy discharge. said unemployment fraud is special category. good luck!!

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Zara Ahmed

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There's an important distinction here. Tax refund intercepts are often handled by different rules than benefit recoupments. Also, if your cousin's bankruptcy attorney didn't properly notify EDD or if EDD filed an adversary proceeding contesting the discharge of the fraud debt, that would explain the different outcome. Each bankruptcy case is unique.

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Nia Johnson

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Have you tried calling them directly? Sometimes the appeal process takes FOREVER but talking to an actual person might help. I had an overpayment issue (not bankruptcy related) and was going in circles with paperwork until I finally got someone on the phone who fixed it in like 10 minutes.

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I've been trying to call for days! Either get the "we're experiencing high call volume" message or wait on hold for an hour+ and then get disconnected. It's incredibly frustrating. I think I need to speak with someone in their legal department anyway, not just a regular claims rep.

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CyberNinja

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I helped my brother with something similar last year. If you're having trouble getting through to EDD on the phone, try using Claimyr. It's a service that basically calls EDD for you and then connects you once they get through to a representative. Saved us hours of frustration! Their website is claimyr.com and they have a video showing how it works: https://youtu.be/JmuwXR7HA10?si=TSwYbu_GOwYzt9km For a complex legal situation like yours, you definitely need to speak with someone in their legal or overpayment department. Make sure to have your bankruptcy case number, discharge date, and any documentation showing EDD was properly notified ready when you call.

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Thank you! I hadn't heard of this service before. I'll check it out because I'm getting nowhere with the regular phone lines. Did your brother eventually get his issue resolved?

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CyberNinja

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Yes, he did! It took about 3 weeks after speaking with the right person, but they eventually processed his paperwork and resolved the issue. The key was getting connected to someone in the appeals department who understood bankruptcy law, not just a general claims rep.

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Mateo Lopez

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wait im confused. how can they even label it fraud in the first place? did u miss reporting income or something? most ppl dont get fraud determinations unless they did something wrong no offense

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It's a long story, but basically I had part-time self-employment income that I misreported. I wasn't trying to commit fraud - I genuinely misunderstood how to report it correctly. But EDD determined it was fraud because they said I should have known better. I didn't have the resources to fight it at the time, and then the bankruptcy happened.

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Zara Ahmed

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This is actually quite common. EDD often labels reporting mistakes as fraud even when there was no intent to deceive. The distinction between 'willful misrepresentation' and honest error can be subjective, but for bankruptcy purposes, the key issue here is that EDD didn't contest the discharge when they had the opportunity.

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I faced a somewhat similar situation with an EDD overpayment that was included in my bankruptcy, though mine wasn't classified as fraud. Here's my experience: after my discharge, EDD initially tried to collect anyway. I had to send them my discharge paperwork THREE SEPARATE TIMES before they updated their system. The bureaucracy there is unbelievable! My advice: be persistent, document EVERYTHING, send all communication certified mail with return receipt, and call regularly for status updates. It took me about 2 months to get it resolved and another month to get my money back. Also, file a formal complaint with the bankruptcy court if they keep attempting collection after being notified of the discharge - sometimes that's the only thing that gets their attention.

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That's really encouraging to hear you eventually got your money back! Did you have to go through their appeal process or was there a different department you worked with? I'm worried my appeal will just get lost in the system.

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I went through their appeal process first, which was moving super slow. What finally worked was contacting their legal affairs division directly (not the general EDD legal, but specifically the bankruptcy unit). I also copied my bankruptcy trustee on all communications. Once the right people were involved, things moved much faster. Don't give up!

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Sean O'Connor

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Keep us updated on what happens!! This could help a lot of people in similar situations.

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I definitely will! Going to try the Claimyr service tomorrow to reach someone by phone, and I'll report back what they say. Fingers crossed!

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Leila Haddad

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This is such a fascinating case from a legal perspective! I'm actually a paralegal who works with bankruptcy cases, and what you're describing sounds like a textbook example of discharge by procedural default. The fact that EDD recouped money AFTER your discharge date is particularly significant - that could potentially be viewed as a violation of the automatic stay provisions. A few thoughts: 1) Document the exact dates of everything - your discharge date, when EDD took the money, when they were notified, etc. 2) Consider reaching out to your bankruptcy attorney again, as this might warrant filing a motion for contempt against EDD for violating the discharge injunction. 3) If EDD's internal appeals process doesn't work, you might need to go back to bankruptcy court. I've seen cases where government agencies had to pay attorney fees and damages for post-discharge collection attempts. Don't let them intimidate you - the law is likely on your side here!

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Dylan Baskin

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Wow, this is really helpful to have a paralegal's perspective! I hadn't even thought about the automatic stay violation angle. You're absolutely right about documenting the dates - my discharge was finalized on December 15th, 2024, and EDD took the money on January 8th, 2025. That's almost a month after discharge! I'm definitely going to bring this up with my bankruptcy attorney. Do you think the contempt motion would be worth pursuing even if EDD eventually returns the money through their appeals process?

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