7 CFR 3.40 – Scope
(a) This subpart specifies the procedures to be used by agencies in collecting debts by administrative offset.
Terms Used In 7 CFR 3.40
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Common law: The legal system that originated in England and is now in use in the United States. It is based on judicial decisions rather than legislative action.
- Contract: A legal written agreement that becomes binding when signed.
(b) This subpart does not apply to:
(1) Debts arising under the Social Security Act, except as provided in 42 U.S.C. § 404;
(2) Payments made under the Social Security Act, except as provided for in 31 U.S.C. § 3716(c) (see 31 CFR 285.4, Federal Benefit Offset);
(3) Debts arising under, or payments made under, the Internal Revenue Code (except for offset of tax refunds) or the tariff laws of the United States;
(4) Offsets against Federal salaries (such offsets are covered by subpart F of this part);
(5) Offsets under 31 U.S.C. § 3728 against a judgment obtained by a debtor against the United States;
(6) Offsets or recoupments under common law, State law, or Federal laws specifically prohibiting offsets or recoupments of particular types of debts;
(7) Offsets in the course of judicial proceedings, including bankruptcy;
(8) Intracontractual offsets to satisfy contract debts taken by a contracting officer under the Contract Disputes Act, 41 U.S.C. §§ 7101–7109; or
(9) Foreign Debt.
(c) Unless otherwise provided for by contract or law, debts or payments that are not subject to administrative offset under 31 U.S.C. § 3716 may be collected by administrative offset under the common law or other applicable statutory authority.
(d) In bankruptcy cases, agencies may request legal advice from OGC concerning the impact of the Bankruptcy Code, particularly 11 U.S.C. § 106, 362, and 553 on pending or contemplated collections by offset.