Reimburse disability insurance

What is the name of your state? Georgia.
I had a 5 yr long term disability insurance with my employer and then had to go on social security disability. Now the insurance company wants me to pay them back for what they paid me minus what I recieved monthly from the social security . What should I do if I had to spend the money on emergency damages to my home. Should I file for total bankruptcy? I do not have the money they are asking me for...

Are you saying that you collected both long term disability and social security disability? If so, and you didn't tell SSA that you were receiving money already, you could be in big trouble. You need to set up payment arrangements. The fact that you used the money to repair your home is irrelevant. You should have used your home owner's insurance for that.

The situation is this.

Your LTD carrier (read your policy) probably (as they all most do) has a provision that it can be reimbursed if at any point you start to receive SSDI (or any other income). So let's say you receive LTD benefits for 2 years and then apply for SSDI. SSDI determines you disabled and gives you backpay to the time you are determined to be disabled. Your LTD carrier can and will ask to be reimbursed the difference. To further that example - if your LTD is, say, 500 a month and SSDI is 200 a month, the LTD carrier will ask for that 200 a month returned. Continuing forward your LTD benefits will be reduced by the benefit you receive from SSDI. SSDI is considered income which can and will be deducted from your LTD benefits. You do not end up with less a month, you end up with a little more.

The fact that you spent the money on - anything is of no consequence. You owe them the money.

You can call them and request a payment schedule and they may deduct that from your monthly LTD benefits rather than you having to pay the whole amount at once. They do not have to accomodate you but perhaps they will be nice. I'd certainly ask. If you do not pay them back this can go into collections and file against you.

I do not think bankruptcy will protect you from this but you could always ask an attorney. It is clearly stated in your LTD policy that they can be reimbursed so you do not have a legal standing. The insurance company would no doubt fight the bankruptcy order becasue you should have known that you were required to repay the money SSDI sent you. It was not, in effect, yours to spend so you can't claim bankruptcy now. It was your responsibility to understand your policy. That sort of thing. I do not know how bankruptcy works spcifically in this situation but I would imagine they have that written in the policy as well. I'd read your policy front to back.

Moburkes - there is no fraud here. SSDI would not care if the person was receiving LTD benefits. LTD benefits do not affect SSDI benefits at all. In fact, LTD companies often help people get SSDI benefits because they know they can get reimbursemnt and reduce their monthly responsibility towards the claimant.

I know because I receive both as well.

You are correct Mrs3. I completely screwed that one up. As an insurance agent, I'm embarrassed that I didn't look at it the opposite way (that the LTD would be reimbursed).

I'm not even going to try to explain what I was thinking, because it was absolutely wrong.

Sorry, OP.

Lord knows trying to figure out LTD policies and whathaveyou for anyone at any time can be a pain.


By the way Moburkes... LOVE your signature! LOL!

My State is Pennsylvainia; Bankruptcy has many chapters. Bankruptcy is thought to be bad, and lets face it , it does carry a stigma to it. However, Bankruptcy is really designed to help people more than harm them. I have seen many people file Bankruptcy clear their debts and in as little as 3-5 years apply for a mortgage and get approved. The reason for this is because Mortgage Co.'s benefit from this, they get to charge a higher interest rate, and be first lien holders. Its win win. If the Mortgage goes into foreclosure they would be first in line to recoup their losses. Bare in mind however, a Mortgage Foreclosure will remain on your record regardless of filing for Bankruptcy until that debt has been satisfied. In Pennsylvania a Judgment for Mortgage Foreclosure is good for 100 years. Which brings me to what to do about the "debt" to a LTD repayment. You say that your employer gave you this benefit. Were you unaware? Was this explained to you during your initial filing for disability benefits? Many people do get duped because its usually a group benefit supplied to employees more than and individual benefit. If the company should file a complaint against you for this reimbursment you can answer that complaint, by answering that complaint you buy yourself some time to A: find a way to get the money or B; as stated previously make payment arrangments. Or sometimes "C" fight it in court. you could also let them put them put a default Judgment against you, If left unsatisfied, it would affect your credit. but, we don't have debters prision any more. Talk to an attorney to find the best possible solution for your situation. Sorry so long but thought this information could help someone.