Is Big Brother Positioned to Pick Your Pocket?

Is Big Brother Positioned to Pick Your Pocket? 

An article in Monday, March 8, 2010 Wall Street Journal by Ellen E. Schultz provides a cautionary tale for recipients of Social Security benefits.  The U.S. Treasury Dept. is on a tear, increasing the percentage of collections resulting from Social Security withholding from 1.6% in 2001 to "roughly 10%..." in 2008. 

How? Why? The "why" is probably obvious: our government is desperate to close the gap between income and expenses.  It recently gotten a new weapon in its arsenal: a provision in the 2008 Farm Bill which "lifted the 10-year statute of limitations on the government's ability to withhold Social Security benefits in collecting debts other than student loans..." WSJ, March 8, 2010.  Doubtless many of its claims are valid.  Of note, though, are two examples in the article.  In the first example, the SSA badly mishandled a claim, and resolved it only after the death of the person.  The second example involved a student loan obtained by forgery.  The victim of the forgery had to prove disability so she doesn't have to pay it back!  (I guess the SSA is not willing to concede she doesn't actually owe the money.)

Bankruptcy often doesn't help for these borrowers.  So what does one do? First, dispute a false or shaky claim.  Professional help - an attorney versed in Social Security appeals - can be worth his weight in gold. If the debt is valid, though, an ounce of prevention is likely to be better than a pound of cure (especially if there is no cure.)  Diplomacy may be more effective than direct confrontation.