20 CFR 422.805 – Demand for payment
(a) Written demand for payment. (1) We will make a written demand, as described in paragraph (b) of this section, promptly to a debtor in terms that inform the debtor of the consequences of failing to cooperate with us to resolve the debt.
Terms Used In 20 CFR 422.805
- Credit bureau: An agency that collects individual credit information and sells it for a fee to creditors so they can make a decision on granting loans. Typical clients include banks, mortgage lenders, credit card companies, and other financing companies. (Also commonly referred to as consumer-reporting agency or credit-reporting agency.) Source: OCC
- Dependent: A person dependent for support upon another.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Garnishment: Generally, garnishment is a court proceeding in which a creditor asks a court to order a third party who owes money to the debtor or otherwise holds assets belonging to the debtor to turn over to the creditor any of the debtor
- Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
(2) We will send a demand letter no later than 30 days after the appropriate official determines that the debt exists. We will send the demand letter to the debtor’s last known address.
(3) When necessary to protect the Government’s interest, we may take appropriate action under this part, including immediate referral to DOJ for litigation, before sending the written demand for payment.
(b) Demand letters. The specific content, timing, and number of demand letters will depend upon the type and amount of the debt and the debtor’s response, if any, to our letters or telephone calls.
(1) The written demand for payment will include the following information:
(i) The nature and amount of the debt, including the basis for the indebtedness;
(ii) The date by which payment should be made to avoid late charges and enforced collection, which must be no later than 30 days from the date the demand letter is mailed;
(iii) Where applicable, the standards for imposing any interest, penalties, or administrative costs as specified under § 422.807;
(iv) The rights, if any, the debtor may have to:
(A) Seek review of our determination of the debt, and for purposes of salary offset or Administrative Wage Garnishment, request a hearing. To request a hearing see §§ 422.810(h) and 422.833(f)); and
(B) Enter into a reasonable repayment agreement when necessary and authorized.
(v) An explanation of how the debtor may exercise any of the rights described in paragraph (b)(1)(iv) of this section;
(vi) The name, address, and phone number of a contact person or office to address any debt-related matters; and
(vii) Our remedies to enforce payment of the debt, which may include:
(A) Garnishing the debtor’s wages through Administrative Wage Garnishment;
(B) Offsetting any Federal or State payments due the debtor, including income tax refunds, salary, certain benefit payments;
(C) Referring the debt to a private collection contractor;
(D) Reporting the debt to a credit bureau or other automated database;
(E) Referring the debt to the DOJ for litigation; and
(F) Referring the debt to the Department of the Treasury for any of the collection actions described in paragraphs (b)(1)(vii)(A) through (E) of this section.
(2) The written demand for payment should also include the following information:
(i) The debtor’s right to review our records pertaining to the debt, or, if the debtor or the debtor’s representative cannot personally review the records, to request and receive copies of such records;
(ii) Our willingness to discuss alternative methods of payment with the debtor;
(iii) If a Federal employee, the debtor may be subject to disciplinary action under 5 CFR part 752 or other applicable authority;
(iv) Any amounts collected and ultimately found to not be owed by the debtor will be refunded;
(v) For salary offset, up to 15 percent of the debtor’s current disposable pay may be deducted every pay period until the debt is paid in full; and
(vi) Dependent upon applicable statutory authority, the debtor may be entitled to consideration for a waiver.
(c) Evidence retention. We will retain evidence of service indicating the date of mailing of the demand letter. The evidence of service may be retained electronically so long as the manner of retention is sufficient for evidentiary purposes.
(d) Pursue offset. Prior to, during, or after the completion of the demand process, if we determine to pursue, or are required to pursue offset, the procedures applicable to offset should be followed (see § 422.821). The availability of funds for debt satisfaction by offset and our determination to pursue collection by offset will release us from the necessity of further compliance with paragraphs (a), (b), and (c) of this section.
(e) Communications from debtors. Where feasible, we will respond promptly to communications from debtors within 30 days, and will advise debtors who dispute debts to furnish available evidence to support their contentions.
(f) Exception. This section does not require duplication of any notice already contained in a written agreement, letter, or other document signed by, or provided to, the debtor.