Treatise on Federal Nontax Debt Collection Law
Fiscal Service will publish this Treatise incrementally in several parts. We will expand the Table of Contents as we draft new chapters. You may access completed chapters using the active links below. These chapters represent the views of the Bureau of the Fiscal Service. They do not necessarily reflect the official policy or position of the Department of Treasury.
Provides federal agency counsel and program staff with an in-depth explanation and interpretation of the laws that govern administrative collection of federal nontax debts, including statutes, regulations, federal common law, interpretive guidance, and the positions that Fiscal Service has taken on debt collection legal matters.
Part I contains multiple chapters;or only individual chapters as needed:
Provides a background on how appropriations principles underlie the federal debt collection process and give rise to an affirmative duty to collect. Also provides an overview of federal common law and constitutional principles that govern federal debt collection, many of which have been codified and expanded upon in statutory law.
Summarizes the constitutional due process requirements for collecting federal nontax debts owed to the United States. Because federal debt collection affects a person’s property rights, the due process guarantee in the Fifth Amendment to the U.S. Constitution is generally implicated by agencies' collection efforts. Statutes and regulations further define what process is due.
Part II contains multiple chapters;or only individual chapters as needed:
Addresses the meanings of the terms debt, debtor, and delinquency in the context of nontax debt collection by federal agencies.
When a person is insolvent, claims of the United States generally have priority over claims owed to other creditors.
Death generally does not extinguish debts and, as with other types of debts, agencies generally must pursue collection of debts owed by deceased debtors.
Describes some basic bankruptcy concepts and addresses some of the factors that agencies should consider when a debtor files for bankruptcy protection.
Provides a broad overview of how entities created under state law can dissolve through state law dissolution proceedings, wind down their business, and liquidate, and how agencies should be aware of state law when pursuing entities that are out of business.
With certain exceptions, agencies must charge interest, penalties, and administrative costs on delinquent federal nontax debts.
Part III contains multiple chapters;or only individual chapters as needed:
To facilitate their collection efforts, agencies may use internal and third-party resources to obtain information about the debtor, including the debtor’s mailing address, phone number, employment information, or ability to pay. The debt collection industry is highly regulated and is subject to a number of federal, state, and local laws, and agencies should be aware of the laws with which many data providers must comply.
Addresses repayment of debt, including through partial payments, installment payment agreements and compromise.
Addresses the centralized collection of delinquent debts, including administrative collection through the Cross-Servicing Program and judicial collection through the Department of Justice.
Defines offset, distinguishes it from other, similar remedies, and explains the law governing each type of governmentwide offset.
Discusses Administrative Wage Garnishment (AWG) authorized by 31 U.S.C. § 3720D, which can be used by federal agencies seeking to collect delinquent federal nontax debts.
Agencies have statutory authority to procure the services of private collection contractors to recover federal nontax debts; however, there are limits on the authority that agencies may delegate to PCCs.
In general, the government should not provide financial assistance to those who have failed to repay other debts owed to the United States. To facilitate this objective, 31 U.S.C. § 3720B requires federal agencies to deny certain types of federal financial assistance to delinquent debtors.
Part IV contains multiple chapters;or individual chapters as needed:
Discusses the rules generally applicable to the suspension and termination of collection activity, and explains the distinctions between the two terms and other, related terms.
Describes terminology related to the suspension and termination of collection action.
Addresses general principles regarding the suspension and termination of collection action, including when approval is needed from the Department of Justice and the impact of suspension or termination on claims with joint and several liability.
Describes the circumstances under which a federal agency may suspend its collection efforts.
Describes the circumstances under which a federal agency may terminate its collection efforts.
Describes the concepts of write-off (including the categories of “currently not collectable” and “closed out”) and discharge (including the requirement to report discharge of indebtedness to the Internal Revenue Service).
Last modified 08/27/19