Recoupment permits Social Security Administration to Recover its Debt for Prepetition Sick Leave from Debtor’s Postpetition Sick Leave Without Violating Discharge Injunction

Recoupment permits Social Security Administration to Recover its Debt for Prepetition Sick Leave from Debtor’s Postpetition Sick Leave Without Violating Discharge Injunction

The Debtor and Plaintiff in this action is an employee of a federal agency, the Social Security Administration (the “SSA”). Prior to the filing of his bankruptcy case, the Debtor had exhausted his accrued sick leave and had used and reached a maximum advanced sick leave balance of 240 hours. Per federal regulations and the terms of employment, accrued sick leave is “repaid” by the amount of sick leave that an employee accrues in any given pay period.

The Debtor contends that his advanced sick leave balance is a debt that was discharged in his bankruptcy case and that the SSA’s collection of the advanced sick leave from his postpetition sick leave violates the discharge injunction.

The SSA contends that the Court should dismiss the action because the Court lacks subject matter jurisdiction to determine civil service personnel issues or, alternatively, grant summary judgment to it because the doctrine of recoupment allows for recovery of the advanced sick leave from postpetition sick leave. The Debtor has not responded to the motion.

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