CFR Subpart E

CFR Subpart E
in effect

22 C.F.R. § 1506.36 Under what circumstances may USADF suspend collection actions?

USADF may suspend or terminate the Agency's collection actions on a debt where the outstanding debt principal does not exceed $100,000. Unless otherwise provided by DOJ regulations, USADF must refer all requests for suspension of debt exceeding $100,000 to the Commercial Litigation Branch, Civil Division, Department of Justice, for approval. If prior to referral to DOJ, USADF determines that a debt is plainly erroneous or clearly without legal merit, the Agency may terminate collection activity regardless of the amount involved without obtaining DOJ concurrence. USADF may waive the assessment of interest, penalty charges and administrative costs during the period of the suspension. Suspension will be for an estimated time period and generally will be reviewed at least every six months to ensure the continued propriety of the suspension.

22 C.F.R. § 1506.37 What are the criteria for suspension?

(a) USADF may suspend collection action on a debt when: (1) The debtor cannot be located; (2) The debtor's financial condition is expected to improve; or (3) The debtor has requested a waiver or review of the debt. (b) Based on the current financial condition of the debtor, USADF may suspend collection activity on a debt when the debtor's future prospects justify retention of the claim for periodic review, and: (1) The applicable statute of limitations has not expired; or (2) Future collection can be effected by offset; or (3) The debtor agrees to pay interest on the debt and suspension is likely to enhance the debtor's ability to fully pay the principal amount of the debt with interest at a later date. (c) USADF will suspend collection activity during the time required for waiver consideration or administrative review prior to agency collection of a debt if the statute under which the request is sought prohibits the Agency from collecting the debt during that time. USADF will ordinarily suspend collection action during the pendency of its consideration of a waiver request or administrative review where statute and regulation preclude refund of amounts collected by the Agency should the debtor prevail. (d) USADF may suspend collection activities on debts of $100,000 or less during the pendency of a permissive waiver or administrative review when there is no statutory requirement and where it determines that: (1) There is a reasonable possibility that waiver will be granted and the debtor may be found not owing the debt (in whole or in part); (2) The Government's interest is protected, if suspension is granted, by the reasonable assurance that the debt can be recovered if the debtor does not prevail; or (3) Collection of the debt will cause undue hardship to the debtor. (e) USADF will decline to suspend collection where it determines that the request for waiver or administrative review is frivolous or was made primarily to delay collection.

22 C.F.R. § 1506.38 Under what circumstances may USADF terminate collection actions?

USADF may terminate collection actions including accrued interest, penalty and administrative costs, where the debt principal does not exceed $100,000. If the debt exceeds $100,000, USADF must obtain the approval from DOJ to terminate further collection actions. Unless otherwise provided for by DOJ regulations, requests to terminate collection on debts in excess of $100,000 are referred to the Commercial Litigation Branch, Civil Division, Department of Justice, for approval.

22 C.F.R. § 1506.39 What are the criteria for termination?

A debt may be terminated where USADF determines that: (a) The Government cannot collect or enforce collection of any significant sum from the debtor, having due regard for available judicial remedies, the debtor's ability to pay, and the exemptions available to the debtor under State and Federal law; (b) The debtor cannot be located, there is no security remaining to be liquidated, and the prospects of collecting by offset are too remote to justify retention of the claim; (c) The cost of further collection action is likely to exceed the amount recoverable; (d) The claim is determined to be legally without merit or enforcement of the debt is barred by any applicable statute of limitations; (e) The evidence necessary to prove the claim cannot be produced or the necessary witnesses are unavailable and efforts to induce voluntary payment have failed; or (f) The debt against the debtor has been discharged in bankruptcy.

22 C.F.R. § 1506.40 What actions by the Agency are permitted after termination of collection activity?

Termination ceases active collection of a debt. However, termination does not preclude the Agency from retaining a record of the account for purposes of: (a) Selling the debt if the CFO determines that such sale is in the best interests of USADF; (b) Pursuing collection at a subsequent date in the event there is a change in the debtor's status or a new collection tool becomes available; (c) Offsetting against future income or assets not available at the time of termination of collection activity; or (d) Screening future applicants for prior indebtedness.

22 C.F.R. § 1506.41 Can the Agency collect against a debt that has been discharged in bankruptcy?

USADF will generally terminate collection activity on a debt that has been discharged in bankruptcy regardless of the amount. However, USADF may continue collection activity subject to the provisions of the Bankruptcy Code for any payments provided under a plan of reorganization. The CFO will seek legal advice from the General Counsel's office if s/he believes that any claims or offsets may have survived the discharge of a debtor.

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