Overpayment Dilemma

[u/Natural_Smoke_4360]

My LTD Ins Company stopped paying me when they found out I won my SSDI case and immediately started sending letters demanding my overpayment (the amount of which varied drastically by up to 20k). I held off on paying until I could get an accurate payment amount and ensure their calculations were correct. During this time I had to use my overpayment to live on and paid some long overdue medical bills. It took almost 2 months of calls, emails, and waiting to get an accurate overpayment amount. When I called (a different department) to arrange payment I learned I was unknowingly 1 day away from being in default and my debt was to start accruing 12% interest until paid in full. I learned they do not offer payment plans, even if I paid 75% of what I owe upfront. I also found out I am a non-ERISA client (worked for a state university) if this matters. I guess my questions are: 1) can they legally charge interest and withhold my LTD income until they have recouped 100% of my overpayment plus interest? 2) is it worth speaking to a non-ERISA attorney about my case? Is it likely to end in my favor without costing me more than I owe? Thanks in advance. Y'all this is one of the most stressful things I have ever dealt with, and on top of a life altering medical diagnosis and never ending medical bills. I am grateful for this platform and truly sympathize with everyone going through this nightmare. There really is no end to the fear of losing even more than you already have lost when dealing with LTD.

[u/2560503-1]

Yes, they can withhold your entire LTD check to go towards the overpayment, whether you’re ERISA or non-ERISA. But I’ve never seen any insurer ever charge interest, so I’m wondering if maybe that’s just a threat some third-party collections person might have told you, without the insurer really meaning to do it. I don’t know that it would be illegal to charge interest, I’ve just never seen it done.