General requirements for debt settlement.

CFR · 2024-01-01 · US · Title 7

(a) (b) (1) It may be necessary to abandon security through the debt settlement process. For example, a community may be rendered uninhabitable by a toxic or hazardous substance. In such cases, debt settlement may proceed provided the servicing official determines: (i) That further collection efforts with respect to the security in question would be ineffective or uneconomical, (ii) That it is in the best interests of the Government to proceed with debt settlement, (iii) That the proposal otherwise meets the requirements appropriate to the type of settlement under consideration, and (iv) The approval of the Administrator is obtained. (2) A servicing action may have been carried out which resulted in a less than complete disposition of security. For example, the Government may have consented to a voluntary sale of a debtor's real and chattel property without reference to other security, which might include, but is not limited to: an additional lien on revenue, a third party pledge of security, or a pledge of personal liability. In such cases, debt settlement may proceed provided the requirements of § 1956.109(b)(1) of this subpart are met. (3) Security can be retained under the compromise and adjustment offers as specified in § 1956.124 of this subpart. (4) Settlement of a claim against an estate will be based on the recovery that may reasonably be expected, taking into consideration such items as the security, costs of administration, allowances of minor children and survivin

official document · source cfr-2024 · id 7:§ 1956.109