Halbert v. Dimas

The Debtors each owed debts to the Illinois Department of Human Services (DHS). Dennis owed $7,962.25 for overpayments made to her under the Illinois Child Care Assistance Program; Halbert owed for overpayments made to her under the Supplemental Nutrition Assistance Program. The Debtors each filed for bankruptcy. The bankruptcy court in each case held that the overpayment debts were not priority domestic support obligations, 11 U.S.C. 547(c)(7). The Seventh Circuit affirmed. Debtors do not owe DHS money for support payments; they owe DHS because they received money they were not statutorily entitled to. Because such a payment is not in the nature of alimony, maintenance, or support, this is merely an overpayment of benefits and the debt is subject to avoidance in bankruptcy. View "Halbert v. Dimas" on Justia Law