Does bankruptcy clear Washington ESD unemployment debt or overpayment?
I'm in a really tough spot and considering bankruptcy. I owe Washington ESD about $4,800 from an overpayment determination last year - they said I didn't report some part-time work correctly during my UI claim. My financial situation has gotten much worse since then and I can barely afford rent. Does anyone know if bankruptcy will discharge this unemployment debt to Washington ESD? I've heard conflicting info about whether government debts get wiped out in bankruptcy.
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Mateo Sanchez
Unfortunately, unemployment overpayment debts to Washington ESD are generally not dischargeable in bankruptcy. They're considered government debts and fall under the same category as tax debts. However, you might want to contact Washington ESD directly to discuss payment plan options or hardship deferrals.
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Nia Wilson
•That's what I was afraid of. I've tried calling Washington ESD so many times but can never get through to anyone. The automated system just hangs up on me.
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Mateo Sanchez
•I hear you on the phone issues. The call volume at Washington ESD is insane. Have you tried their online messaging system through your SecureAccess Washington account?
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Aisha Mahmood
Actually, I went through bankruptcy 2 years ago and my unemployment overpayment did NOT get discharged. The trustee told me that debts arising from fraud or government benefits are typically excluded. But you should definitely talk to a bankruptcy attorney - they'll know the specifics for your situation.
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Nia Wilson
•Did Washington ESD keep trying to collect from you during the bankruptcy process? I'm worried they'll garnish my wages or something.
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Aisha Mahmood
•They did put collection on hold during the actual bankruptcy proceedings, but once it was discharged they resumed collection efforts. The debt was still there.
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Ethan Clark
Before you go the bankruptcy route, you really should try to work with Washington ESD on a payment plan. I know getting through to them is a nightmare, but there's actually a service called Claimyr (claimyr.com) that helps people get connected to Washington ESD agents. They have a video demo at https://youtu.be/7DieNd3C7zQ showing how it works. Might be worth trying since you need to discuss hardship options anyway.
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Nia Wilson
•Never heard of that service before. Is it legit? I'm pretty desperate at this point but don't want to get scammed.
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Ethan Clark
•Yeah it's real. They basically handle the calling for you so you don't have to spend hours on hold. I used it when I had adjudication issues last year and actually got through to someone.
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AstroAce
•How much does something like that cost though? If OP is considering bankruptcy they probably can't afford extra services.
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Yuki Kobayashi
wait so bankruptcy doesn't wipe out unemployment debt? that's messed up. i thought bankruptcy was supposed to give you a fresh start
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Mateo Sanchez
•There are different types of debts in bankruptcy. Some get discharged, others don't. Government debts, student loans, and certain other obligations typically survive bankruptcy.
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Yuki Kobayashi
•that's so unfair. the whole system is rigged against regular people
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Carmen Vega
I'm a bankruptcy paralegal and can confirm that unemployment overpayments are generally non-dischargeable under 11 USC 523(a)(7). However, there are sometimes exceptions if the overpayment wasn't due to fraud or willful misrepresentation. You'd need to review the specific determination from Washington ESD to see if they alleged fraud or just an error in reporting.
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Nia Wilson
•The notice I got just said 'failure to report earnings' - it didn't use the word fraud anywhere. Does that make a difference?
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Carmen Vega
•It might. If it's just a reporting error rather than intentional fraud, you might have more options. But you'd definitely need to consult with a bankruptcy attorney who can review your case specifics.
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Andre Rousseau
•This is why I always kept detailed records of everything when I was on UI. The system is so complicated and they can come after you years later.
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Zoe Stavros
Have you looked into whether Washington ESD offers any hardship waivers for overpayments? I know some states have programs where they'll reduce or eliminate debt if you can prove financial hardship.
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Nia Wilson
•I haven't been able to find much info about that on their website. That's another reason I need to actually talk to someone there.
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Ethan Clark
•This is exactly why I mentioned Claimyr earlier. Getting through to Washington ESD to ask about hardship options is nearly impossible on your own. At least with their service you know you'll actually reach a human.
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Jamal Harris
Just went through this exact situation last month. Washington ESD overpayment of $3,200 that I couldn't afford. Bankruptcy attorney told me the same thing - unemployment debt usually doesn't get discharged. But I was able to set up a payment plan for $50/month after finally getting through to them.
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Nia Wilson
•How long did it take you to get through to someone? I've been trying for weeks.
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Jamal Harris
•Honestly, I ended up using that Claimyr service someone mentioned. Cost less than what I would have spent on phone calls and gas driving to their office. Got connected within a few hours.
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GalaxyGlider
•What's the minimum payment they'll accept? I can probably manage $25-30 a month but not much more.
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Mei Wong
The bankruptcy code is pretty specific about government debts. Section 523(a)(7) makes debts to government units for fines, penalties, or overpayments non-dischargeable UNLESS the debt became due more than 3 years before filing AND some other conditions are met. Most unemployment overpayments don't qualify for these exceptions.
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Nia Wilson
•My overpayment is from last year so it's not even close to 3 years old. Sounds like I'm stuck with it.
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Mei Wong
•Pretty much, yeah. Your best bet is working with Washington ESD on payment arrangements or seeing if you qualify for any hardship programs they might have.
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Liam Sullivan
this whole thread is depressing. so if you lose your job and make a mistake on unemployment they can chase you forever even if you go bankrupt? what happened to helping people when they're down
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Mateo Sanchez
•The system does seem harsh sometimes. The theory is that unemployment benefits are taxpayer funded so they want to prevent fraud and ensure repayment when benefits are incorrectly paid out.
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Liam Sullivan
•i get preventing fraud but this sounds like just a mistake in reporting hours, not deliberate fraud
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Amara Okafor
OP, before you file bankruptcy you should really exhaust all options with Washington ESD. They do have hardship provisions but you have to specifically request them. Also check if you can appeal the original overpayment determination - sometimes there are errors in their calculations.
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Nia Wilson
•The appeal deadline was way back when I first got the notice. I was dealing with other crises at the time and didn't realize how important it was to appeal immediately.
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Amara Okafor
•That's unfortunate. The appeal window is pretty short for Washington ESD determinations. But you can still request a hardship review for the collection of the debt.
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Giovanni Colombo
I work in collections (not for Washington ESD) and can tell you that government agencies are usually willing to work with people on payment plans if you can demonstrate genuine hardship. The key is actually making contact and being honest about your financial situation.
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Nia Wilson
•That's the problem - making contact! I've called probably 50 times and never gotten through to a real person.
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Giovanni Colombo
•Have you tried calling right when they open? Sometimes that helps. Or try the Claimyr service others mentioned - sounds like it could solve your contact problem.
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Fatima Al-Qasimi
Just want to add that even if bankruptcy doesn't discharge the debt, it might still be worth considering if you have other debts that would be discharged. Don't let one non-dischargeable debt prevent you from getting relief on others.
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Nia Wilson
•True, I do have credit card debt and medical bills too. The unemployment debt is just the biggest single amount.
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Fatima Al-Qasimi
•Definitely talk to a bankruptcy attorney then. Even if the Washington ESD debt survives, eliminating your other debts might free up money to pay the unemployment overpayment.
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StarStrider
My cousin had a similar situation and Washington ESD actually reduced her overpayment by about 30% when she provided documentation of her financial hardship. It's worth pursuing even if it's difficult to reach them.
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Nia Wilson
•Really? They can actually reduce the amount owed? I thought once they made the determination it was set in stone.
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StarStrider
•Apparently they have some discretion in hardship cases. But she had to provide tax returns, bank statements, all kinds of documentation to prove she couldn't pay the full amount.
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Dylan Campbell
UPDATE: Just wanted to thank everyone for the advice. I ended up using Claimyr to get through to Washington ESD and they were actually really helpful. Set up a $40/month payment plan and they waived the interest. Still not dischargeable in bankruptcy but at least it's manageable now.
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Nia Wilson
•Wait, are you the OP? I'm confused. But that's great news that Claimyr worked for you!
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Dylan Campbell
•Sorry, no - I'm someone else who found this thread while searching for the same info. Figured I'd share my experience since it might help others.
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Ethan Clark
•Glad to hear Claimyr worked out for you! That's exactly the kind of result OP needs - actually getting through to discuss options.
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Sofia Torres
Final thought - even though unemployment overpayments usually survive bankruptcy, Chapter 13 bankruptcy might still help you by consolidating all debts into one manageable payment plan. Worth discussing with an attorney.
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Nia Wilson
•I'll definitely look into that. At this point I need to explore every option.
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Sofia Torres
•Good luck with whatever you decide. The important thing is taking action rather than ignoring the debt and hoping it goes away.
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