In re Thigpen

Section 1320b-17 allows but does not require SSA to withhold the maximum amount of current benefits under one Social Security program to recover a past overpayment under another Social Security program, even where the overpayment arose from the recipient's fraud. For that reason "SSA's withholding of Thigpen's OASDI benefits to recover its prior SSI overpayments is a setoff not a recoupment, and therefore that SSA's withholding is not exempt from the automatic stay." Thigpen , 590 B.R. at 818.

Setoff in Bankruptcy

The right of setoff is of equitable origin, designed to facilitate the adjustment…