If you are looking for an attorney to represent you in your Social Security overpayment case, you will find that many disability attorneys do not take overpayment cases. The reason has to do with Social Security’s rules about how attorneys get paid.
There are two ways for Social Security attorneys to get paid: fee agreements and fee petitions. Fee petitions are used for overpayment cases.
Usually, a disability attorney will enter into a fee agreement with you to take 25% of your disability backpay or $6,000, whichever is less. Then, when the case is over, if you have won, Social Security forwards the attorney’s fee to your attorney.
The problem with overpayment cases is that when you win an overpayment case, there is no backpay for you to receive. Instead, you win by getting Social Security to say you do not owe an overpayment. With no backpay, there is no money for your attorney to collect as a fee under the fee agreement.
When attorneys do take overpayment cases, they will usually have you sign a fee petition agreeing to pay an hourly fee for the time that they spend working on your case. Then, when the case is over, the lawyer has to petition Social Security to approve the fee. Social Security will consider a number of factors when deciding whether a particular fee is fair, including the outcome of the case and the level of skill that was required to handle the case. Social Security can approve the attorney’s fee petition request, disapprove it, or modify the fee to a lower amount.
Getting Social Security to approve the fee is an additional step that some disability attorneys do not want to bother with, and so they just decide that they will not do overpayment cases.
When attorneys take Social Security overpayment cases, they will almost always ask you to pay a retainer fee upfront before they will start work. A retainer represents an estimate of the number of hours it might take the attorney to work on your case. For example, if an attorney thought it would take him 15 hours to handle your overpayment case, and his usual rate is $200 per hour, then he might decide to charge you a $3,000 retainer fee before beginning work on your case (15 hours x $200). If he spends more than 15 hours, you will owe him $200 per hour for the additional work. If he spends less than 15 hours, he will return money from your retainer to you at the end of the case.
Attorneys in Social Security overpayment cases are conscious that their clients are usually lower-income individuals due to their disability, and they know that it might be hard for the client to pay the attorney’s bill. By asking for a retainer, they can assure themselves that the money to pay their bill exists and will be available at the end of the case.
Attorneys must hold their retainers in special bank accounts called client trust accounts. After the attorney has completed all of the work on your case, he will submit a petition to Social Security to review the fee agreement and approve his fee. Once Social Security approves the fee (or modifies it), the attorney can take money to pay the fee out of the trust account.
But even if you can afford to pay a retainer fee, it might not make financial sense for you to hire an attorney if the overpayment is small compared to the retainer.
Using the example above, if Social Security says you owe a $6,000 overpayment, and your attorney is asking for $3,000 to work on the case, then if you lose, there is a possibility that you will end up paying $9,000 instead of $6,000 at the end of the case. That is, if you lose your case, you will owe your attorney $3,000 in fees (if Social Security approves the request), and you will still owe the overpayment.
On the other hand, if Social Security says you owe a $160,000 overpayment, and your attorney will charge you a $3,000 retainer to begin working on it, then you might decide that it is worth it to hire an attorney. Even if you lose, the amount you will owe the attorney for trying to fix the problem is small compared to the entire debt.
If an attorney represented you at an earlier stage in your disability case, you should consider contacting that person to see if he or she can help you with your overpayment. The attorney will already be familiar with you and your disability case, and might be more willing to help you than an attorney who did not have a relationship with you. Even if that lawyer will not represent you, he or she may give you a good referral to a legal aid office or another attorney who would represent you.
If you handled your own disability claim, you can ask people you trust for referrals to attorneys they have used and liked. You can also locate an attorney by calling different disability attorneys in your community and asking if they take overpayment cases. Once you have a few names, you can meet with attorneys to see whose approach you like best.
You may be able to find a Legal Aid attorney to represent you in your overpayment case. Legal Aid attorneys work for non-profit law firms whose goal is to provide free legal advice and representation to low-income individuals in civil cases. (A civil case is any kind of case that does not involve a crime. Disability cases are civil cases.)
Legal Aid attorneys may be more likely to take overpayment cases than some disability lawyers, but Legal Aid offices do not have enough attorneys to represent everyone who needs help. They prioritize the types of cases they handle based on their resources and the types of legal issues that are important to low-income people in their community. To find out if a legal aid office will handle your overpayment case, you will have to contact them.
The largest funder of legal aid offices in the country is the Legal Services Corporation (LSC). You can find your local LSC-funded legal aid office on the LSC website.
There may be other legal aid offices near you that do not receive LSC funding. For example, many universities with law schools operate legal aid clinics. To find legal aid clinics in your area, check your local yellow pages.