PART 11—DEBT COLLECTION Authority: 5 U.S.C. 301, 5514; 28 U.S.C. 509, 510; 31 U.S.C. 3711, 3716, 3718, 3720A, 3720D. Source: Order No. 1201-87, 52 FR 24449, July 1, 1987, unless otherwise noted. Subpart A—Retention of Private Counsel for Debt Collection § 11.1 Delegation of authority. The Assistant Attorney General for Administration shall exercise the full authority of the Attorney General to develop and administer the Department of Justice program for debt collection by private counsel. This authority shall include, but is not limited to, the authority to set policies and procedures for the program, and to enter into contracts for the retention of private counsel. The Assistant Attorney General for Administration can in turn delegate authority regarding debt collection to subordinate officials as appropriate. Existing delegations of authority with respect to settlement determinations on disputed claims shall remain in force. See generally, 28 CFR 0.160 et seq. [Order No. 1201-87, 52 FR 24449, July 1, 1987, as amended by AG Order 3689-2016, 81 FR 43943, July 6, 2016] § 11.2 Private counsel debt collection program. The Assistant Attorney General for Administration, in consultation with the Executive Office for United States Attorneys, shall designate the districts that will participate in the program. U.S. Attorneys in the districts chosen for the program, shall direct the full cooperation and assistance of their respective offices in implementing the program. Among other things, the U.S. Attorneys shall designate an Assistant U.S. Attorney to serve as the Contracting Officer's Representative (COR) on the contracts with private debt collection lawyers in their respective districts. The CORs will be responsible for assisting the contracting officer by supervising the work of the private counsel in their respective districts and providing necessary approvals with respect to the initiation or settlement of lawsuits or similar matters. [Order No. 1201-87, 52 FR 24449, July 1, 1987, as amended by AG Order 3689-2016, 81 FR 43943, July 6, 2016] § 11.3 Compliance with existing laws. The procurement of the services of private attorneys for debt collection shall be accomplished in accordance with the competitive procurement procedures mandated by Federal law, and set forth in 41 U.S.C. 3307. Best efforts shall be made to encourage extensive participation by law firms owned and controlled by socially and economically disadvantaged individuals and law firms that are qualified HUBZone small business concerns in the competition for award of these contracts in the program districts. Such efforts shall include, at minimum, publication of the requirement for these services in FedBizOpps and in a selection of pertinent legal publications likely to reach socially and economically disadvantaged firms, as well as sending written notice of the requirements to bar associations that have a significant socially and economically disadvantaged membership in the program districts. These special recruitment efforts will not authorize or permit preferential consideration to any bidders in selection for award of these contracts. The Department's Office of Small and Disadvantaged Business Utilization shall also make its resources available to assist in encouraging broad participation in this competition. [Order No. 1201-87, 52 FR 24449, July 1, 1987, as amended by AG Order 3689-2016, 81 FR 43944, July 6, 2016] Subpart B—Administration of Debt Collection Source: Order No. 1625-92, 57 FR 44107, Sept. 24, 1992, unless otherwise noted. § 11.4 Purpose and scope. (a) Purpose. (b) Scope. (2) This subpart applies to collections by the Department from: (i) Federal employees who are indebted to the Department; (ii) Employees of the Department who are indebted to other agencies; and (iii) Other persons, organizations, or entities that are indebted to the Department. (3) This subpart does not apply: (i) To debts or claims arising under the Internal Revenue Code of 1986 (26 U.S.C. 1 et seq. et seq. (ii) To a situation to which the Contract Disputes Act (41 U.S.C. 601 et seq. (iii) In the case where collection of a debt is explicitly provided for or prohibited by another statute. The provisions of § 11.8 of this subpart do not apply to salary offset to recover travel advances under 5 U.S.C. 5705 or employee training expenses under 5 U.S.C. 4108. (4) Nothing in this subpart precludes the compromise, suspension, or termination of collection actions where appropriate under the FCCS. (5) This subpart does not govern debt collection procedures implemented by other agencies. [Order No. 1625-92, 57 FR 44107, Sept. 24, 1992, as amended by Order No. 3089-2009, 74 FR 35117, July 20, 2009; AG Order 3689-2016, 81 FR 43944, July 6, 2016] § 11.5 Delegation of authority. Authority to conduct the following activities is hereby delegated to heads of Department organizations with respect to debts arising in their respective organizations: (a) Initiate and effectuate the administrative collection process. (b) Accept or reject compromise offers and suspend or terminate collection actions where the claim does not exceed $100,000 or such higher amount as the Attorney General may from time to time prescribe, exclusive of interest, administrative costs, and penalties as provided herein, as set forth in 31 U.S.C. 3711(a)(2). (c) Report to consumer reporting agencies certain data pertaining to delinquent debts. (d) Use offset procedures to effectuate collection. (e) Take any other action necessary to facilitate and augment collection in accordance with the policies contained herein and as otherwise provided by law. [Order No. 1625-92, 57 FR 44107, Sept. 24, 1992, as amended by Order No. 3089-2009, 74 FR 35117, July 20, 2009] § 11.6 Definitions. Except where the context clearly indicates otherwise or where the term is otherwise defined elsewhere in this subpart, the following definitions shall apply to this subpart. (a) Agency (1) An executive agency as defined by 5 U.S.C. 105; (2) A military department as defined by 5 U.S.C. 102; (3) The United States Postal Service and the Postal Rate Commission; (4) An agency of the judicial branch, including a court as defined by 28 U.S.C. 610, the District Court for the Northern Mariana Islands, and the Judicial Panel on Multidistrict Litigation; (5) An agency of the legislative branch, including the U.S. Senate and the U.S. House of Representatives; and (6) Other entities that are establishments of the federal government. (b) Bureau (c) Certification (d) Components (e) Compromise (f) Creditor agency (g) Department Justice Department (h) Disposable pay (1) Amounts withheld from benefits payable under title II of the Social Security Act where the withholding is required by law; (2) Federal employment taxes; (3) Amounts mandatorily withheld for the United States Soldiers' and Airmen's Home; (4) Fines and forfeiture ordered by a court-martial or by a commanding officer; (5) Amounts deducted for Medicare; (6) Federal, state, or local income taxes to the extent authorized or required by law, but no greater than would be the case if the employee claimed all dependents to which he or she is entitled and such additional amounts for which the employee presents evidence of a tax obligation supporting the additional withholding; (7) Health insurance premiums; (8) Normal retirement contributions (e.g., Civil Service Retirement deductions, Survivor Benefit Plan payments, or Retired Servicemen's Family Protection Plan payments), not including amounts deducted for supplementary coverage; and (9) Normal life insurance premiums ( e.g., (i) Employee (j) Federal Claims Collection Standards (FCCS) (k) Hearing official (l) Notice of Intent to Offset Notice of Intent (m) Notice of Salary Offset (n) Organization (o) Organization head (p) Paying agency (q)(1) Payroll office (2) Applicable payroll office (r) Salary offset coordination officer [Order No. 1625-92, 57 FR 44107, Sept. 24, 1992, as amended by Order No. 2650-2003, 68 FR 4928, Jan. 31, 2003; Order No. 3089-2009, 74 FR 35117, July 20, 2009] § 11.7 Salary adjustments. The following debts shall not be subject to the salary offset procedures of § 11.8: (a) Any adjustment to pay arising out of an employee's election of coverage or a change in coverage under a Federal benefits program requiring periodic deductions from pay, if the amount to be recovered was accumulated over 4 pay periods or less; (b) A routine intra-agency adjustment of pay that is made to correct an overpayment of pay attributable to clerical or administrative errors or delays in processing pay documents, if the overpayment occurred within the 4 pay periods preceding the adjustment and, at the time of such adjustment, or as soon thereafter as practical, the individual is provided written notice of the nature and the amount of the adjustment and point of contact for contesting such adjustment; or (c) Any adjustment to collect a debt amounting to $50 or less, if, at the time of such adjustment, or as soon thereafter as practical, the individual is provided written notice of the nature and the amount of the adjustment and a point of contact for contesting such adjustment. [Order No. 3089-2009, 74 FR 35117, July 20, 2009] § 11.8 Salary offset. (a) Notice requirements before offset. (1) That the organization head has reviewed the records relating to the claim and has determined that a debt is owed, including the amount of the debt and the facts giving rise to the debt; (2) The organization head's intention to collect the debt by means of deduction from the employee's current disposable pay account until the debt and all accumulated interest is paid in full; (3) A repayment schedule that includes the amount, frequency, proposed beginning date, and duration of the intended deductions; (4) The opportunity for the employee to propose an alternative written schedule for the voluntary repayment of the debt, in lieu of offset, on terms acceptable to the Department. The employee shall include a justification in the request for the alternative schedule. The schedule shall be agreed to and signed by both the employee and the organization head; (5) An explanation of the Department's policy concerning interest, penalties, and administrative costs, including a statement that such assessments must be made unless excused in accordance with the Federal Claims Collection Standards; (6) The employee's right to inspect and copy all records of the Department pertaining to the debt claimed or to receive copies of such records if the debtor is unable personally to inspect the records, due to geographical or other constraints; (7) The name, address, and telephone number of an officer or employee of the Department to whom requests for access to Department records relating to the debt must be sent; (8) The employee's right to a hearing conducted by an impartial hearing official (an administrative law judge or other hearing official not under the supervision or control of the Attorney General) with respect to the existence and amount of the debt claimed or the repayment schedule ( i.e., (9) The name, address, and telephone number of the officer or employee of the Department to whom a proposal for voluntary repayment must be sent; and the name, address, and telephone number of an officer or employee of the Department who may be contacted concerning procedures for requesting a hearing; (10) The method and deadline for requesting a hearing; (11) That the timely filing of a petition for a hearing on or before the 15th calendar day following receipt of the Notice of Intent will stay the commencement of collection proceedings; (12) The name and address of the office to which the petition should be sent; (13) That the Department will initiate certification procedures to implement a salary offset not less than 30 days from the date of receipt of the Notice of Intent to Offset, unless the employee files a timely petition for a hearing; (14) That a final decision on whether a hearing will be held (if one is requested) will be issued at the earliest practical date, but not later than 60 days after the filing of the petition requesting the hearing; (15) That any knowingly false or frivolous statements, representations, or evidence may subject the employee to: (i) Disciplinary procedures appropriate under 5 U.S.C. chapter 75, 5 CFR part 752, or any other applicable statutes or regulations; (ii) Penalties under the False Claims Act, 31 U.S.C. 3729-3731, or under any other applicable statutory authority; or (iii) Criminal penalties under 18 U.S.C. 286, 287, 1001, and 1002 or under any other applicable statutory authority; (16) Any other rights and remedies available to the employee under statutes or regulations governing the program for which the collection is being made; (17) That unless there are applicable contractual or statutory provisions to the contrary, amounts paid on or deducted from debts that are later waived or found not to be owed to the United States will be promptly refunded to the employee, and (i) Interest shall be paid on any amount paid on or deducted from a debt that is found not to be owed to the United States; and (ii) Interest shall not be paid on any amount paid on or deducted from a debt that is later waived; and (18) That proceedings with respect to such debt are governed by 5 U.S.C. 5514. (b) Review of Departmental records related to the debt. (2) In response to a timely request submitted by the debtor, the designated salary offset coordination officer will notify the employee of the location and time when the employee may inspect and copy records related to the debt. (3) If the employee is unable personally to inspect the records, due to geographical or other constraints, the salary offset coordination officer shall arrange to send copies of such records to the employee. (c) Opportunity for a hearing where the Department is the creditor agency Request for a hearing. (ii) The employee must specify whether an oral hearing is requested. If an oral hearing is desired, the request should explain why the matter cannot be resolved by review of the documentary evidence alone. The request must be signed by the employee and must fully identify and explain with reasonable specificity all the facts, evidence, and witnesses, if any, that the employee believes support his or her position. (2) Failure to timely submit. (3) Obtaining the services of hearing official. (ii) When the debtor is a Department employee, the Department may contact any agent of another agency, as designated in 5 CFR part 581, appendix A, or as otherwise designated by the agency, to request a hearing official. (4) Procedure Notice. (ii) Oral hearing. (A) Informal conferences with the hearing official in which the employee and agency representative are given full opportunity to present evidence, witnesses, and argument; (B) Informal meetings in which the hearing examiner interviews the employee; or (C) Formal written submissions followed by an opportunity for oral presentation. Witnesses who testify in oral hearings shall do so under oath or affirmation. (iii) Documentary hearing. (iv) Record. (5) Date of decision. (6) Content of decision. (i) A summary of the facts concerning the origin, nature, and amount of the debt; (ii) The hearing official's findings, analysis, and conclusions; and (iii) The terms of any repayment schedules, if applicable. (7) Failure to appear. e.g., (d) Certification where the Department is the creditor agency. (i) The hearing official determines that a debt exists; or (ii) The employee admits the existence and amount of the debt by failing to request a hearing. (2) The certification must be in writing and must state: (i) That the employee owes the debt; (ii) The amount and basis of the debt; (iii) The date the government's right to collect the debt first accrued; (iv) That the Department's regulations have been approved by OPM pursuant to 5 CFR part 550, subpart K; (v) If the collection is to be made by lump-sum payment, the amount and data such payment will be collected; (vi) If the collection is to be made in installments, the number of installments to be collected, the amount of each installment, and the commencing date of the first installment, if a date other than the next officially established pay period; and (vii) The date the employee was notified of the debt, the action(s) taken under 5 U.S.C. 5514(a), and the dates such actions were taken. (e) Voluntary repayment agreements as alternative to salary offset where the Department is the creditor agency. (2) In response to a timely proposal by the debtor, the organization head shall notify the employee whether the employee's proposed written agreement for repayment is acceptable. It is within the organization head's discretion to accept or reject a repayment agreement. (3) If the organization head decides that the proposed repayment agreement is unacceptable, the employee shall have 15 days from the date he or she received notice of the decision in which to file a petition for a hearing. (4) If the organization head decides that the proposed repayment agreement is acceptable, the arrangement shall be put in writing and signed by both the employee and the organization head. (f) Special review where the Department is the creditor agency. (2) In determining whether, as a result of materially changed circumstances, an offset would prevent the employee from meeting essential subsistence expenses (costs incurred for food, housing, clothing, transportation, and medical care), the employee shall submit a detailed statement and supporting documents for the employee, his or her spouse, and dependents indicating: (i) Income for all sources; (ii) Assets; (iii) Liabilities; (iv) Number of dependents; (v) Expenses for food, housing, clothing, and transportation; (vi) Medical expenses; and (vii) Exceptional expenses, if any. (3) If the employee requests a special review under this paragraph, the employee shall file an alternative proposed offset or payment schedule and a statement, with supporting documents, showing why the current salary offset or payments result in an extreme financial hardship to the employee. (4) The organization head shall evaluate the statement and supporting documents and determine whether the original offset or repayment schedule imposes an extreme financial hardship on the employee. The organization head shall notify the employee in writing within 30 days of such determination, including, if appropriate, his or her acceptance of a revised offset or payment schedule. (5) If the special review results in a revised offset or repayment schedule, the salary offset coordination officer shall provide a new certification to the paying agency. (g) Notice of salary offset where the Department is the paying agency. (i) The certification has been received from the creditor agency; and (ii) Salary offset will be initiated at the next officially established pay interval. (2) The applicable payroll office shall provide a copy of the notice to the creditor agency and advise such agency of the dollar amount to be offset and the pay period when the offset will begin. (h) Procedures for salary offset where the Department is the paying agency Generally. (ii) The applicable payroll office shall determine the amount of an employee's disposable pay and offset salary. (iii) Deductions shall begin the pay period following receipt by the applicable payroll office of the certification or as soon thereafter as possible. (2) Types of collection Lump-sum payment. (ii) Installment deductions. (iii) Lump-sum deductions from final check. (iv) Lump-sum deductions from other sources. (3) Multiple debts. (4) Precedence of salary deductions by the Department. (A) Indebtedness due the Department. (B) Indebtedness due other agencies. (C) Garnishments for alimony and child support payments. (D) Court-ordered bankruptcy payments under the Bankruptcy Code. (E) Optional life insurance premiums. (F) Other voluntary deductions including allotments and assignments, in the order determined by the paying agency. (ii) In the event that a debt to the Department is certified while an employee is subject to salary offset to repay another agency, the applicable payroll office may decide whether the debt to the other agency should be repaid in full before collecting the Department's claim or whether changes should be made in the salary deduction being sent to the other agency. If debts owed to the Department can be collected in one pay period, the payroll office may suspend the salary offset to the other agency for that pay period in order to liquidate the Department's debt. (i) Coordinating salary offset with other agencies Responsibility of the Department as the creditor agency. (A) Arranging for hearing upon proper petition by a federal employee; (B) Preparing the Notice of Intent to Offset consistent with the requirements of paragraph (a) of this section; (C) Obtaining hearing officials from other agencies pursuant to paragraph (c)(3) of this section; and (D) Ensuring that each certification of debt is sent to a paying agency pursuant to paragraph (d)(2) of this section. (ii) Upon completion of the procedures established in paragraphs (a) through (f) of this section, the salary offset coordination officer shall submit a debt claim and an installment agreement or other instruction on the payment schedule, if applicable, to the employee's paying agency. (iii) If the employee is in the process of separating from government employment, the Department shall submit its debt claim to the employee's paying agency for collection by lump-sum deductions from the employee's final check. The paying agency shall certify the total amount of its collection and furnish a copy of the certification to the Department and to the employee. (iv) If the employee is already separated and all payments due from his or her former paying agency have been paid, the Department may, unless otherwise prohibited, request that money due and payable to the employee from the federal government be administratively offset to collect the debt. (v) When an employee transfers to another paying agency, the Department shall not repeat the procedures described in paragraphs (a) through (f) of this section in order to resume collecting the debt. Instead, the Department shall review the debt upon receiving the former paying agency's notice of the employee's transfer and shall ensure the collection is resumed by the new paying agency. (2) Responsibility of the Department as the paying agency Complete claim. (ii) Incomplete claim. (iii) Review. (iv) Employees who transfer from one paying agency to another. (j) Interest, penalties, and administrative costs. (k) Refunds. (i) The debt is compromised or otherwise found not to be owing to the United States; or (ii) An administrative or judicial order directs the Department to make a refund. (2) Unless required by law or contract, refunds under this paragraph (k) shall not bear interest. (l) Request from a creditor agency for the services of a hearing official. (2) The Department may provide a hearing official upon request of a creditor agency when the debtor works for the creditor agency and that agency cannot arrange for a hearing official. (3) The salary offset coordination officer shall arrange for qualified personnel to serve as hearing officials. (4) Services rendered under this paragraph (l) shall be provided on a fully reimbursable basis pursuant to 31 U.S.C. 1535. (m) Non-waiver of rights by payments. [Order No. 1625-92, 57 FR 44107, Sept. 24, 1992, as amended by Order No. 3089-2009, 74 FR 35117, July 20, 2009] § 11.9 Administrative offset. (a) Collection. (b) Withholding of payment. (1) Failure to withhold payment would substantially prejudice the Department's ability to collect the debt; and (2) The time before the payment is to be made does not reasonably permit completion of the procedures described in paragraph (c) of this section. Such prior withholding shall be followed promptly by the completion of the procedures described in paragraph (c) of this section. (c) Debtor's rights. (1) Written notification of the nature and amount of the claim, the intention of the organization head to collect the claim through administrative offset, and a statement of the rights of the debtor under this paragraph; (2) An opportunity to inspect and copy the records of the Department with respect to the claim; (3) An opportunity to have the Department's determination of indebtedness reviewed by the organization head. Any request for review by the debtor shall be in writing and be submitted to the Department within 30 days of the date of the notice of the offset. The organization head may waive the time limit for requesting review for good cause shown by the debtor; and (4) An opportunity to enter into a written agreement for the repayment of the amount of the claim at the discretion of the Department. If the procedures described in paragraph (b) of this section are employed, the procedures described in this paragraph shall be effected after offset. (d) Interest. Subpart C—Collection of Debts by Administrative and Tax Refund Offset Source: Order No. 1792-93, 58 FR 51223, Oct. 1, 1993, unless otherwise noted. § 11.10 Scope. (a) The provisions of 31 U.S.C. 3716 allow the head of an agency to collect a debt through administrative offset. The provisions of 31 U.S.C. 3716 and 3720A authorize the Secretary of the Treasury, acting through the Bureau of the Fiscal Service (BFS) and other Federal disbursing officials, to offset certain payments to collect delinquent debts owed to the United States. This subpart authorizes the collection of debts owed to the United States by persons, organizations, and other entities by offsetting Federal and certain state payments due to the debtor. It allows for collection of debts that are past due and legally enforceable through offset, regardless of whether the debts have been reduced to judgment. (b) Nothing in this subpart precludes the Department from pursuing other debt collection procedures to collect a debt that has been submitted to the Department of the Treasury under this subpart. The Department may use such debt collection procedures separately or in conjunction with the offset procedures of this subpart. [AG Order 3689-2016, 81 FR 43944, July 6, 2016] § 11.11 Definitions. (a) Debt. et seq. et seq. (b) Past due. (c) Notice. (d) Dispute. (e) Legally enforceable. [Order No. 1792-93, 58 FR 51223, Oct. 1, 1993, as amended by AG Order 3689-2016, 81 FR 43944, July 6, 2016] § 11.12 Centralized offset. (a) The Department must refer any legally enforceable debt more than 120 days past-due to BFS for administrative offset under 31 U.S.C. 3716(c)(6). The Department must refer any past-due, legally enforceable debt to BFS for tax refund offset purposes pursuant to 31 U.S.C. 3720A(a) at least once a year. Before referring debts for offset, the Department must certify to BFS compliance with the provisions of 31 U.S.C. 3716(a) and 3720A(b). There is no time limit on when a debt can be collected by offset. (b) The Department will provide the debtor with written notice of its intent to offset before initiating the offset. Notice will be mailed to the debtor at the current address of the debtor, as determined from information obtained from the IRS pursuant to 26 U.S.C. 6103(m)(2), (4), (5) or from information regarding the debt maintained by the Department of Justice. The notice sent to the debtor will state the amount of the debt and inform the debtor that: (1) The debt is past due; (2) The Department intends to refer the debt to BFS for offset purposes; (3) Before the debt is referred to BFS for offset purposes, the debtor has 60 days from the date of notice to present evidence that all or part of the debt is not past due, that the amount is not the amount currently owed, that the outstanding debt has been satisfied, or, if the debt is a judgment debt, that the debt has been satisfied, or that collection action on the debt has been stayed. (c) If the debtor neither pays the amount due nor presents evidence that the amount is not past due or is satisfied or that collection action is stayed, the Department will refer the debt to BFS for offset purposes. (d) A debtor may request a review by the Department if the debtor believes that all or part of the debt is not past due or is not legally enforceable, or, in the case of a judgment debt, that the debt has been stayed or the amount satisfied, as follows: (1) The debtor must send a written request for review to the address provided in the notice. (2) The request must state the amount disputed and the reasons why the debtor believes that the debt is not past due, is not legally enforceable, has been satisfied, or, if a judgment debt, has been satisfied or stayed. (3) The request must include any documents that the debtor wishes to be considered or state that additional information will be submitted within the time permitted. (4) If the debtor wishes to inspect records establishing the nature and amount of the debt, the debtor must request an opportunity for such an inspection in writing. The office holding the relevant records shall make them available for inspection during normal business hours. (5) The request for review and any additional information submitted pursuant to the request must be received by the Department at the address stated in the notice within 60 days of the date of issuance of the notice. (6) The Department will review disputes and shall consider its records and any documentation and arguments submitted by the debtor. The Department's decision to refer to the BFS any disputed portion of the debt shall be made by the Assistant Attorney General for Administration or his designee, who shall hold a position at least one supervisory level above the person who made the decision to offset the debt. The Department shall send a written notice of its decision to the debtor. There is no administrative appeal of this decision. (7) If the evidence presented by the debtor is considered by a non-Departmental agent or other entities or persons acting on the Department's behalf, the debtor will be accorded at least 30 days from the date the agent or other entity or person determines that all or part of the debt is past-due and legally enforceable to request review by an officer or employee of the Department of any unresolved dispute. (8) Any debt that previously has been reviewed pursuant to this section or any other section of this part, or that has been reduced to a judgment, may not be disputed except on the grounds of payments made or events occurring subsequent to the previous review of judgment. (e) The Department will notify the BFS of any change in the amount due promptly after receipt of payments or notice of other reductions. (f) If more than one debt is owed, payments eligible for offset will be applied in the order in which the debts became past due. [Order No. 1792-93, 58 FR 51223, Oct. 1, 1993, as amended by AG Order 3689-2016, 81 FR 43944, July 6, 2016] § 11.13 Non-centralized offset. (a) When offset under § 11.12 of this part is not available or appropriate, the Department may collect past-due, legally enforceable debts through non-centralized administrative offset. See 31 CFR 901.3(c). In these cases, the Department may offset a payment internally or make an offset request directly to a Federal payment agency. (b) At least 30 days before offsetting a payment internally or requesting a Federal payment agency to offset a payment, the Department will send notice to the debtor in accordance with the requirements of 31 U.S.C. 3716(a). When referring a debt for offset under this paragraph (b), the Department will certify, in writing, that the debt is valid, delinquent, legally enforceable, and that there are no legal bars to collection by offset. In addition, the Department will certify its compliance with these regulations concerning administrative offset. See 31 CFR 901.3(c)(2)(ii). [AG Order 3689-2016, 81 FR 43944, July 6, 2016] Subpart D—Administrative Wage Garnishment Source: AG Order 3689-2016, 81 FR 43944, July 6, 2016, unless otherwise noted. § 11.21 Administrative wage garnishment. (a) Purpose. (b) Scope. (2) Nothing in this section precludes the compromise of a debt or the suspension or termination of collection action in accordance with applicable law. See, for example, the Federal Claims Collection Standards (FCCS), 31 CFR parts 900-904. (3) The receipt of payments pursuant to this section does not preclude the Department from pursuing other debt collection remedies, including the offset of Federal payments to satisfy delinquent nontax debt owed to the United States. The Department may pursue such debt collection remedies separately or in conjunction with administrative wage garnishment. (4) This section does not apply to the collection of delinquent nontax debt owed to the United States from the wages of Federal employees from their Federal employment. Federal pay is subject to the Federal salary offset procedures set forth in 5 U.S.C. 5514 and other applicable laws. (5) Nothing in this section requires the Department to duplicate notices or administrative proceedings required by contract or other laws or regulations. (c) Definitions. Agency Business day Day Debt claim Debtor Delinquent nontax debt Disposable pay Employer Evidence of service Garnishment Withholding order (d) General rule. (e) Notice requirements. (i) The nature and amount of the debt; (ii) The intention of the agency to initiate proceedings to collect the debt through deductions from pay until the debt and all accumulated interest, penalties, and administrative costs are paid in full; and (iii) An explanation of the debtor's rights, including those set forth in paragraph (e)(2) of this section, and the time frame within which the debtor may exercise those rights. (2) The debtor shall be afforded the opportunity: (i) To inspect and copy agency records related to the debt; (ii) To enter into a written repayment agreement with the agency under terms agreeable to the agency; and (iii) For a hearing in accordance with paragraph (f) of this section concerning the existence or the amount of the debt or the terms of the proposed repayment schedule under the garnishment order. However, the debtor is not entitled to a hearing concerning the terms of the proposed repayment schedule if these terms have been established by written agreement under paragraph (e)(2)(ii) of this section. (3) The agency will retain evidence of service indicating the date of mailing of the notice. (f) Hearing Request for hearing. (2) Type of hearing or review. (ii) If the agency determines that an oral hearing is appropriate, the time and location of the hearing shall be established by the agency. An oral hearing may, at the debtor's option, be conducted either in person or by telephone conference. All travel expenses incurred by the debtor in connection with an in-person hearing will be borne by the debtor. All telephonic charges incurred during the hearing will be the responsibility of the agency. (iii) In those cases where an oral hearing is not provided under this section, the agency shall nevertheless accord the debtor a “paper hearing,” that is, the agency will decide the issues in dispute based upon a review of the written record. The agency will establish a reasonable deadline for the submission of evidence. (3) Effect of agency receipt of hearing request within 15 business days of notice. (4) Effect of agency receipt of hearing request after 15 business days of notice. (5) Hearing official. (6) Procedure. (i) The date and time of a telephonic hearing; (ii) The date, time, and location of an in-person oral hearing; or (iii) The deadline for the submission of evidence for a written hearing. (7) Burden of proof. (ii) If the agency satisfies its initial burden, and the debtor disputes the existence or amount of the debt, the debtor must prove, by a preponderance of the evidence, that no debt exists or that the amount of the debt is incorrect. In addition, the debtor may present evidence that the terms of the repayment schedule are unlawful or would cause a financial hardship to the debtor, or that collection of the debt may not be pursued due to operation of law. (8) Record. (9) Date of decision. (i) The agency may not issue a withholding order until the hearing is held and a decision rendered; or (ii) If the agency had previously issued a withholding order to the debtor's employer, the agency must suspend the withholding order beginning on the 61st day after the receipt of the hearing request and continuing until a hearing is held and a decision is rendered. (10) Content of decision. (i) A summary of the facts presented; (ii) The hearing official's findings, analysis, and conclusions; and (iii) The terms of any repayment schedules, if applicable. (11) Final agency action. et seq. (12) Failure to appear. (g) Wage garnishment order. (i) Within 30 days after the debtor fails to make a timely request for a hearing ( i.e., (ii) If the debtor makes a timely request for a hearing, within 30 days after a final decision is made by the agency to proceed with garnishment, or (iii) As soon as reasonably possible thereafter. (2) The withholding order sent to the employer under paragraph (g)(1) of this section shall be in a form prescribed by the Secretary of the Treasury. The withholding order shall contain the signature of, or the image of the signature of, the head of the agency or that person's delegatee. The order shall contain only the information necessary for the employer to comply with the withholding order. Such information includes the debtor's name, address, and Social Security Number, as well as instructions for withholding and information as to where payments should be sent. (3) The agency will retain evidence of service indicating the date of mailing of the order. (h) Certification by employer. (i) Amounts withheld. (2)(i) Subject to the provisions of paragraphs (i)(3) and (4) of this section, the amount of garnishment shall be the lesser of: (A) The amount indicated on the garnishment order up to 15% of the debtor's disposable pay; or (B) The amount set forth in 15 U.S.C. 1673(a)(2) (Restriction on Garnishment). That amount is the amount by which a debtor's disposable pay exceeds an amount equivalent to thirty times the Federal minimum wage. See 29 CFR 870.10. (3) When a debtor's pay is subject to withholding orders with priority the following shall apply: (i) Unless otherwise provided by Federal law, withholding orders issued under this section shall be paid in the amounts set forth under paragraph (i)(2) of this section and shall have priority over withholding orders that are served later in time. Notwithstanding the foregoing, withholding orders for family support shall have priority over withholding orders issued under this section. (ii) If amounts are being withheld from a debtor's pay pursuant to a withholding order served on an employer before a withholding order issued pursuant to this section, or if a withholding order for family support is served on an employer at any time, the amounts withheld pursuant to the withholding order issued under this section shall be the lesser of: (A) The amount calculated under paragraph (i)(2) of this section, or (B) An amount equal to 25% of the debtor's disposable pay less the amount(s) withheld under the withholding order(s) with priority. (iii) If a debtor owes more than one debt to the agency, the agency may issue multiple withholding orders if the total amount garnished from the debtor's pay for such orders does not exceed the amount set forth in paragraph (i)(2) of this section. (4) An amount greater than that set forth in paragraphs (i)(2) and (3) of this section may be withheld upon the written consent of the debtor. (5) The employer shall promptly pay to the agency all amounts withheld under the withholding order issued pursuant to this section. (6) An employer shall not be required to vary its normal pay and disbursement cycles in order to comply with the withholding order. (7) Any assignment or allotment by an employee of the employee's earnings shall be void to the extent it interferes with or prohibits execution of the withholding order issued under this section, except for any assignment or allotment made pursuant to a family support judgment or order. (8) The employer shall withhold the appropriate amount from the debtor's wages for each pay period until the employer receives notification from the agency to discontinue wage withholding. The garnishment order shall indicate a reasonable period of time within which the employer is required to commence wage withholding. (j) Exclusions from garnishment. (k) Financial hardship. (2) A debtor requesting a review under paragraph (k)(1) of this section shall submit the basis for claiming that the current amount of garnishment results in a financial hardship to the debtor, along with supporting documentation. The agency shall consider any information submitted in accordance with procedures and standards established by the agency. (3) If the agency finds financial hardship, it shall downwardly adjust, by an amount and for a period of time agreeable to the agency, the amount garnished to reflect the debtor's financial condition. The agency will notify the employer of any adjustments to the amounts to be withheld. (l) Ending garnishment. (2) At least annually, an agency shall review its debtors' accounts to ensure that accounts that have been paid in full are no longer subject to garnishment. (m) Actions prohibited by the employer. (n) Refunds. (2) Unless required by Federal law or contract, refunds under this section shall not bear interest. (o) Right of action.