3-10.120
Nationwide Central Intake Facility
|
Commencing on October 1, 1990, all federal agencies are required to
refer claims when the principle amount is $1,000,000 or less for litigation
or debt enforcement to the Department of Justice through the Nationwide
Central Intake Facility. The Nationwide Central Intake Facility acknowledges
receipt of the claim, provides a limited review of the Claims Collection
Litigation Report (CCLR) for compliance with the Federal Claims Collection
Standards, and forwards the information to the appropriate United States
Attorney's office for litigation. Federal agencies are not required to send
the following types of cases to the Nationwide Central Intake Facility:
anti-trust cases; environment and natural resources cases; tax cases; fraud
cases; interagency claims; renewal of judgment lien only cases; and if the
agency is seeking Department of Justice concurrence on an agency's proposal
to suspend or terminate action to collect a claim.
In cases where time is of the essence in securing the government's
position, the agency may send a referral directly to the United States
Attorney's office with a copy of the CCLR to the Nationwide Central Intake
Facility. If the Financial Litigation Unit receives a referral package
directly from an agency, or they are requested to enforce a civil judgment
from another division within the United States Attorney's office that has
not been previously docketed by the Nationwide Central Intake Facility,
Financial Litigation Unit personnel shall provide data on the referral by
completing and mailing the "Nationwide Case Initiation Sheet" to the
Nationwide Central Intake Facility.
3-10.130
Claims Collection Litigation Report
|
The Federal Claims Collection Standards (4 C.F.R. Parts 101 to 105)
prescribe regulations which agencies must follow to collect, compromise and
suspend or terminate collection action on their claims. Agencies are
required to provide certain information to the Department of Justice when
referring claims for litigation and enforced collection. See 4 C.F.R. §
105.1 et seq. The Financial Litigation Staff, with the support and
cooperation of the General Accounting Office, developed the Claims
Collection Litigation Report (CCLR) as the standard report to convey this
information.
Unless an exception has been granted by the Financial Litigation Staff,
agencies are required to provide a completed CCLR with each claim they
refer. See 4 C.F.R. § 105.2. United States Attorneys' offices are
responsible for ensuring that CCLRs comply with the requirements set forth
in Federal Claims Collection Standards. These requirements should be
addressed with local agency representatives when claims are referred without
the CCLR, or when the CCLRs provided are inadequate. The Deputy Director,
Legal Programs, should be advised of any problems which cannot be resolved
or continue to persist at the local level.
Some information requested on the CCLR may be superfluous to a
particular agency's claim or impossible for the agency to obtain. The
agency's inability to obtain all information required on the CCLR should not
be viewed as a bar to the referral of a claim for litigation. However,
information requested on the CCLR should be provided to the extent feasible
and any omissions by the agency should be noted throughout the CCLR.
The Federal Claims Collection Standards also provide that once a claim
has been referred to the Department of Justice, the referring agency shall
refrain from having any contact with the debtor and shall direct the debtor
to the United States Attorney on any matters concerning the claim. The
Standards further provide that the United States Attorney shall be
immediately notified by the referring agency of any payments which are
received from the debtor subsequent to referral of a claim. See 4 C.F.R.
§ 105.1(d).
For further information on the review of claim referral packages, see
the EOUSA Resource Manual at 108.
[cited in
EOUSA Resource Manual 108]
3-10.141
Returning Deficient Referrals
|
If the CCLR or accompanying claim referral package is deficient and the
deficiency cannot be expeditiously resolved with a minimum of effort, a
deficiency or declination letter shall be immediately prepared and used to
return the claim to the agency. This letter will inform the client agency of
the specific reason(s) why the claim is considered deficient and that the
United States Attorney presently declines to litigate and enforce collection
of the claim. See the EOUSA Resource Manual at
109.
Suit shall not be filed on any claim which is referred after the
applicable statute of limitations period has expired. Such claims shall be
immediately declined and returned to the agency. Agencies are required to
refer claims to the Department of Justice as early as possible, consistent
with aggressive agency collection action and should be well within the
period for bringing a timely suit against the debtor. 4 C.F.R. §
105.1(a).
[cited in USAM 3-10.160;
EOUSA Resource Manual 109]
3-10.142
Acknowledgment of Referral
|
As soon as it is determined that the CCLR and accompanying referral
package is complete, the claim shall be opened in the United States
Attorney's office collection tracking system. The Acknowledgement of
Referral portion of the Nationwide Central Intake Facility Claim
Acknowledgement/Closing Notification form must be returned to the Nationwide
Central Intake Facility. Additionally, an acknowledgment letter shall be
promptly sent to the referring agency to notify the agency that the claim
has been received, the name of the contact at the United States Attorney's
office handling the case, and the United States Attorney's office case
number.
3-10.150
Precomplaint Demand
|
Agencies which document their compliance with the Federal Claims
Collection Standards in the CCLR will have fulfilled the pre-filing notice
requirements of Executive Order No. 12988 on Civil Justice Reform dated
February 1996, and the United States Attorney's office should not send
another prejudgment demand letter. Further delay in filing a complaint
post-referral will usually not be warranted and may be counterproductive.
[updated March 2000]
3-10.160
Filing Complaint
|
Pursuant to an Office of the Inspector General finding made during a
Fiscal Year 1990 United States Attorney's offices inspection, routine
fully-documented referrals for debt collection action should be filed within
30 days of receipt. More complex referrals which may require additional
preparation time should be filed within 45 days. Incomplete referrals should
be immediately declined. See
USAM 3-10.141.
Financial Litigation Unit personnel are not required to "perform
collection actions which should have been undertaken by any other agency." 4
C.F.R. § 102.1. Claims are referred to United States Attorneys' offices
for litigation and enforced collection, and the referring agency is under an
affirmative obligation to provide the current address of the debtor. See 4
C.F.R. § 105.2. Although a limited amount of skiptracing incident to
litigation may be undertaken, if substantial effort is needed to locate the
debtor prior to filing suit, then the case should be returned to the agency
for skiptracing.
In cases where federal law authorizes the United States to enforce a
state court judgment (i.e., Public Health Service cases), the United States
Attorney's office may register the judgment with the clerk of the court and
enforce it accordingly.
3-10.170
Prejudgment Agreements to Pay
|
If, after the government files the complaint, the debtor contacts the
United States Attorneys' office, acknowledges the debt, and requests to
enter into an installment payment plan, then the debtor shall be required to
complete and sign a Form OBD-500, Financial Statement, or similar statement
of financial disclosure. If the financial disclosure information reveals the
debtor's ability to pay the debt in full, then the United States Attorney's
office should require the debt to be paid in full. If an installment payment
plan is justified based upon a review of the Financial Statement and other
credit information, the debtor shall then be required to execute a consent
judgment and that judgment shall be immediately entered with the court. The
consent judgment shall be for an amount equal to the principal amount of the
debt plus all prejudgment interest, administrative costs and penalties
payable to the date of judgment, and court costs. The client agency shall be
promptly notified of the entry of the judgment.
Once a determination has been made by the United States Attorney to
pursue a claim, the government's interests should be promptly secured. Given
that the debtor has been provided ample opportunity to arrange for payment
of the debt prior to referral, it is counterproductive for the United States
Attorney to provide further opportunity for payment without first securing
the government's interests. Accordingly, the use of confess-judgment notes
(sometimes referred to as "Cognovit notes") or promissory notes containing
an agreement for judgment are not acceptable.
A claim shall remain in prejudgment status only in those instances where
the debtor agrees to pay the debt in full within 30 days and executes a
consent judgment with the understanding that the judgment will be entered
with the court if full payment is not received within 30 days. If full
payment is not received within the 30 day period, the executed consent
judgment shall be immediately entered with the court and enforced collection
efforts initiated.
The United States Attorney shall personally approve and set forth in
writing for the Financial Litigation Unit any exceptions to this policy
which are required for the handling of unusual types of situations or
claims. Any approved exceptions shall be incorporated into the district's
Financial Litigation Plan.
In addition to obtaining a consent judgment, Financial Litigation Unit
personnel should ensure that installment payment terms are set forth within
the body of a separate written payment plan or letter of agreement signed by
the debtor. If the terms for repayment are included in the consent judgment,
such consent judgment shall also provide for future modification of the
terms upon a change in the debtor's economic circumstances. This will allow
for increases in the debtor's monthly payment amount when justified by
updated financial information.
Financial Litigation Unit personnel should always endeavor to increase
the amount of a debtor's monthly payment so that the debt is satisfied in
the shortest period of time possible. Updated financial information should
be obtained from the debtor and reviewed at least every year.
3-10.180
Civil Compromise Policy
|
A compromise is an agreement to accept less than the total amount owing
in principal interest, and administrative costs in civil cases. Criminal
cases (with the exception of bail bond forfeitures) cannot be compromised.
Compromises are accepted only when it is not in the best interest of the
government to pursue the full amount of the debt. Pursuant to Title 4, Code
of Federal Regulations (C.F.R.), Section 103.2, the factors to consider
include: (1) the debtor's inability to pay the full amount within a
reasonable time; or (2) the refusal of the debtor to pay the claim in full
and the government's inability to enforce collection in full within a
reasonable time by enforced collection proceedings.
Pursuant to 28 C.F.R., Part O, Subpart Y, Civil Division Directive
14-95, compromises must be approved by a supervisory Assistant United States
Attorneys.
A claim or judgment should only be compromised with agency approval.
Whenever a claim is compromised, the full compromised debt should be
collected in a lump sum. Any agreement to accept several payments must
provide for payment of the full compromise amount within 90 days. If several
payments are agreed to with full payment within 90 days, the government's
claim must be secured by the entry of a judgment.
Following payment of a compromised amount, the Financial Litigation Unit
shall promptly send the client agency a notice of compromise and a closing
letter. The letter will document for the agency the reason(s) why the claim
was compromised and inform it of the total amount recovered.
[updated October 1998]
3-10.200
Civil Postjudgment Financial Litigation Activity—Perfecting the
Judgment
|
Immediately following expiration of the 10-day automatic stay after
entry of the judgment (whether by default, stipulation, court determination,
or by the referral of a judgment from another district), see Fed. R. Civ. P.
62(a), immediate action shall be taken to perfect the judgment as a lien in
accordance with the Federal Debt Collection Procedures Act. See 28 U.S.C.
§ 3201.
Special care should be taken to ensure that the judgment is perfected as
a lien by filing a certified copy of the abstract of the judgment in the
manner in which a notice of tax lien would be filed under paragraphs (1) and
(2) of § 6323(f) of the Internal Revenue Code of 1986. A lien should be
filed in accordance with state law filing requirements and should be filed
in any state where the debtor owns real property.
[cited in USAM 3-9.100]
3-10.220
Bill of Cost
|
Upon entry of a judgment, the Financial Litigation Unit should present a
Bill of Cost to the Clerk of the United States District Court. See 28 U.S.C.
§ 1920.
The amount of any costs taxed by the clerk shall be included in the
letter notifying the agency of entry of judgment. A Bill of Cost should also
be presented for the recovery of any subsequent costs and the agency
promptly informed of the amount of such costs once taxed by the clerk.
3-10.230
Notice of Entry of Judgment to Client Agency
|
The client agency shall be promptly notified of the entry of the
judgment. Upon request, the Financial Litigation Unit shall provide a copy
of the judgment to the agency. The letter of notification should contain the
necessary information to enable the agency to update properly their records
and maintain accurate account balances. The letter will also serve as a
request for any supplemental ability to pay information which the agency may
have obtained subsequent to referring the claim.
3-10.240
Postjudgment Demand
|
Immediately following expiration of the 10-day automatic stay after
entry of the judgment, see Fed. R. Civ. P. 62(a), a letter shall be mailed
to the debtor providing notice of entry of the judgment and demanding
payment in full within a time certain. The period of time established for
full payment from the debtor shall not exceed 30 days from the date of the
letter.
The date by which full payment should be received from the debtor shall
be entered into the automated tickler system to ensure timely follow-up. If
full payment or an appropriate offer to repay is not received by this date,
enforced collection proceedings shall be immediately initiated.
3-10.300
Installment Payment Plans
|
An installment payment plan shall be established only when the debtor is
unable to make payment in full, or to obtain suitable financing from a
private institution in order to make payment in full. Establishment of an
installment payment plan shall not be considered unless and until a
financial statement has been fully completed and signed by the debtor. Under
no circumstances shall an installment payment plan be agreed to, or the
terms and conditions of any plan be discussed, with the debtor prior to
receiving a financial statement. All financial information provided must
first be reviewed by Financial Litigation Unit personnel to determine
whether a payment plan would be appropriate and, if so, to ensure that the
maximum monthly payment amount is obtained and the judgment is liquidated at
the earliest possible date.
See also the EOUSA Resource Manual at
110.
[cited in USAM 3-10.400;
EOUSA Resource Manual 110]
3-10.310
Default on Installment Payment Plan
|
"Default" is defined as the debtor's failure to make a payment within
five days of the payment due date agreed to and established in the written
installment payment plan. In the event of a default, a past due notice shall
be mailed to the debtor not later than 20 days from the date of default. The
past due notice should clearly advise the debtor that if he or she fails to
make payment and cure the default within 10 days of the date of the notice,
or fails to make any future payments as scheduled in the plan, the United
States Attorney's office will proceed to execute on the judgment without
further notice.
3-10.400
Receipt of Payments by United States Attorneys' Office
|
All payments made by a debtor in a civil case, including prejudgment
settlements, are to be made payable to the United States Department of
Justice and deposited through the Direct Deposit (Lockbox) System or the
Direct Deposit Program (Debtor Statement Program).
All judgments in payment status, other than bankruptcy cases, see
USAM 3-10.420, shall be retained by the
United States Attorney's office until fully satisfied. This policy does not
affect in any way the return of uncollectible judgments to the agencies for
surveillance or the return of marginal cases if payments will never meet the
requirements of USAM 3-10.300.
[cited in USAM 3-10.420]
3-10.420
Return of Certain Bankruptcy Cases to Agencies for Collection
|
A policy different from that set forth above, at
USAM 3-10.400, has been established for certain bankruptcy cases under
chapters 11, 12 and 13 of title 11, in which there is a confirmed plan which
provides for payment to the government. After confirmation of a plan takes
place, the case shall be returned to the agency for monitoring and
collection.
If special circumstances exist in a particular case which indicate that
there is a likelihood of the debtor, or debtor in possession, defaulting on
its terms of payment to the government under the plan, or other problems
exist relating to timely payment or timely notification of default, the
United States Attorney's office may continue to handle the case while
monitoring its plan for compliance. At such time as these special
circumstances no longer exist, the United States Attorney's office shall
return the case to the agency for continued collection.
An exception to the policy of returning cases to the referring agency
arises when the United States Attorney's office has reason to believe that
there has been fraud or conversion of government property in a bankruptcy
case. The case should then be referred to the civil division of the United
States Attorney's office for screening, in order to determine whether
measures may be taken that would provide for additional civil collections,
or if it should be forwarded to the criminal division of the United States
Attorney's office for possible prosecution.
The United States Attorneys' offices and referring agency representatives
should coordinate locally to ensure that any bankruptcy case returned to the
agency can and will be handled properly. A brief letter must accompany each
returned case. This letter shall advise the agency of its responsibility
for collection and processing payments under the debtor's plan, and for
returning the case to the United States Attorney's office within 30 days of
a default by the debtor on the terms of payment under the plan for purposes
of litigation and enforcement. The letter should include the debtor's full
name, the agency's file number, the scheduled payment amount pursuant to the
confirmed plan, and the scheduled payment date.
[updated November 2008]
[cited in USAM 3-10.400]
3-10.500
Enforced Collections
|
When a debtor fails to respond to the postjudgment demand letter or to
cure a default on the terms of an established payment plan, immediate steps
shall be taken to initiate enforced collection proceedings. The rights and
remedies available to the United States, and exemptions available to the
debtor, under the Federal Debt Collection Procedures Act, 28 U.S.C.
§§ 3001-3308, should be considered in determining the most efficient
and effective means to satisfy the judgment.
[cited in USAM 3-12.350]
3-10.510
Discovery to determine ability to pay
|
Full use shall be made of those discovery methods provided for in the
Federal Rules of Civil Procedure whenever financial information is not
voluntarily provided by the debtor. If the debtor fails to respond to such
discovery requests, those sanctions provided for under the Federal Rules of
Civil Procedure shall be pursued promptly and vigorously. All financial
information which is obtained through discovery shall be thoroughly reviewed
and a determination made on how to proceed to enforce the judgment.
3-10.520
Federal Debt Collection Procedures Act Tools
|
The Federal Debt Collection Procedures Act provides the exclusive civil
procedures the United States must utilize for prejudgment and postjudgment
debt recovery. Enforcement of unpaid debts shall be aggressively pursued in
accordance with the Federal Debt Collection Procedures Act, 28 U.S.C.
§§ 3001-3308.
3-10.530
Offset
|
Offset of a debtor's federal tax return, federal salary, or federal
administrative benefit should be undertaken whenever permitted by law.
3-10.540
Depriving Debtors of Their Residence
|
Approval of the United States Attorney should be obtained prior to
executing upon a debtor's residence. Normally, execution on a debtor's
residence should not be made if the debtor is cooperative and making
reasonable efforts to satisfy the judgment. Similarly, execution upon the
debtor's personal or real property should not result in the debtor's family
becoming a public charge.
[updated January 1998]
3-10.600
Transfers
|
Civil postjudgment debts should not be transferred to another district
simply because the debtor resides in another district. The nationwide
enforcement provision of the Federal Debt Collection Procedures Act, 28
U.S.C. § 3004(b), can be used to enforce collection in another district.
A debt should be transferred to another district if it is in the best
interests of the United States to do so (e.g., state law preclude the United
States from using the Federal Debt Collection Procedures Act enforcement
provisions).
3-10.620
Assists
|
Instances will arise when a Financial Litigation Unit requires the
assistance of another United States Attorneys' office to help collect on a
judgment. For example, an "assist" might be needed when: (1) a debtor has
assets or is employed in another district and the assistance of that
district is needed to attach the debtor's assets or garnish the debtor's
wages; (2) there are multiple debtors on one debt and they reside in other
districts; or (3) to obtain essential information necessary to utilize
Federal Debt Collection Procedures Act provisions.
The Financial Litigation Unit requesting an "assist" shall provide the
following: (1) specific instructions on the assistance needed; (2) all
documents necessary to accomplish the goal of the assist requested; and (3)
informing the assisting district when the balance of the debt changes.
Primary record keeping and reporting responsibility will remain with the
office requesting the assist.
3-10.700
Terminating Civil Postjudgment Collection Action—Suspension of
Collection Action
|
In some instances the prospect of obtaining a substantial sum through
enforced collection proceedings will be so poor that continuation of such
efforts would be futile. At the same time, however, future prospects for
enforcing collection may be such that the judgment cannot be considered
permanently uncollectible. With the approval of the Assistant United States
Attorney responsible for financial litigation, collection action on such
judgments may be suspended.
Updated financial information on suspended civil debts should be
obtained and a re-evaluation of the debtor's ability to pay should be made
at least once every six months. Judgments should not be retained in a
suspense status for more than two years. If a determination is made that a
judgment remains uncollectible after making timely, periodic reviews of the
debtor's financial situation over a two-year period, the judgment should be
returned to the agency for surveillance or closed as uncollectible.
3-10.720
Returning Case to Agency for Surveillance
|
Many judgments which are deemed presently uncollectible may have future
collection potential. For example, the debtor may be young or well educated,
or may inherit wealth. When this situation exists, a decision must be made
on whether to suspend collection action or to return the judgment to the
agency for surveillance. By necessity, this decision must be made on a
case-by-case basis, giving due regard to the judgment amount, the posture of
the debtor, the likelihood for improvement in the debtor's financial
situation over time, and the effectiveness of those judgment enforcement
remedies available under the Federal Debt Collection Procedures Act.
When the judgment is presently uncollectible but has future collection
potential, and the United States Attorney is not in a better position than
the agency to keep the matter under surveillance, the judgment should be
returned to the agency for surveillance. The transmittal letter returning
the judgment to the agency for surveillance shall advise the agency that if
the debtor's financial situation improves or an enforcement action becomes
practical, the agency should re-refer the case to the United States Attorney
for legal action. The letter should also inform the agency of the date on
which the judgment lien will expire and request that the United States
Attorney be notified in writing six months prior to that date if the agency
wishes to have the judgment lien renewed.
[cited in USAM 3-10.730]
3-10.730
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |