FCC 1.1911 Revised as of October 1, 2014
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§ 1.1911 Demand for payment.
(a) Written demand as described in paragraph (b) of this section, and
which may be in the form of a letter, order, memorandum, or other form
of written communication, will be made promptly upon a debtor of the
United States in terms that inform the debtor of the consequences of
failing to cooperate to resolve the debt. The specific content, timing,
and number of demand letters depend upon the type and amount of the
debt, including, e.g., any notes and the terms of agreements of the
parties, and the debtor's response, if any, to the Commission's letters
or telephone calls. One demand letter will be deemed sufficient. In
determining the timing of the demand letter(s), the Commission will
give due regard to the need to refer debts promptly to the Department
of Justice for litigation, in accordance with the FCCS. When necessary
to protect the Government's interest (for example, to prevent the
expiration of a statute of limitations), written demand may be preceded
by other appropriate actions under the FCCS, including immediate
referral for litigation. The demand letter does not provide an
additional period within to challenge the existence of, or amount of
the non-tax debt if such time period has expired under Commission rules
or other applicable limitation periods. Nothing contained herein is
intended to limit the Commission's authority or discretion as may
otherwise be permitted to collect debts owed.
(b) The demand letter will inform the debtor of:
(1) The basis for the indebtedness and the opportunities, if any, of
the debtor to request review within the Commission;
(2) The applicable standards for assessing any interest, penalties, and
administrative costs (§ § 1.1940 and 1.1941);
(3) The date by which payment is to be made to avoid late charges and
enforced collection, which normally will not be more than 30 days from
the date that the initial demand letter was mailed or hand-delivered;
(4) The name, address, and phone number of a contact person or office
within the Commission.
(c) The Commission will expend all reasonable effort to ensure that
demand letters are mailed or hand-delivered on the same day that they
are dated. As provided for in any agreement among parties, or as may be
required by exigent circumstances, the Commission may use other forms
of delivery, including, e.g., facsimile telecopier or electronic mail.
There is no prescribed format for demand letters. The Commission
utilizes demand letters and procedures that will lead to the earliest
practicable determination of whether the debt can be resolved
administratively or must be referred for litigation.
(d) The Commission may, as circumstances and the nature of the debt
permit, include in demand letters such items as the Commission's
willingness to discuss alternative methods of payment; its policies
with respect to the use of credit bureaus, debt collection centers, and
collection agencies; the Commission's remedies to enforce payment of
the debt (including assessment of interest, administrative costs and
penalties, administrative garnishment, the use of collection agencies,
Federal salary offset, tax refund offset, administrative offset, and
litigation); the requirement that any debt delinquent for more than 180
days be transferred to the Department of the Treasury for collection;
and, depending on applicable statutory authority, the debtor's
entitlement to consideration of a waiver. Where applicable, the debtor
will be provided with a period of time (normally not more than 15
calendar days) from the date of the demand in which to exercise the
opportunity to request a review.
(e) The Commission will respond promptly to communications from the
debtor, within 30 days whenever feasible, and will advise debtors who
dispute the debt that they must furnish available evidence to support
(f) Prior to the initiation of the demand process or at any time during
or after completion of the demand process, if the Commission determines
to pursue, or is required to pursue, offset, the procedures applicable
to offset in § § 1.1912 and 1.1913, as applicable, will be followed.
The availability of funds or money for debt satisfaction by offset and
the Commission's determination to pursue collection by offset shall
release the Commission from the necessity of further compliance with
paragraphs (a), (b), (c), and (d) of this section.
(g) Prior to referring a debt for litigation, the Commission will
advise each person determined to be liable for the debt that, unless
the debt can be collected administratively, litigation may be
initiated. This notification will follow the requirements of Executive
Order 12988 (3 CFR, 1996 Comp., pp. 157-163) and may be given as part
of a demand letter under paragraph (b) of this section or in a separate
document. Litigation counsel for the Government will be advised that
this notice has been given.
(h) When the Commission learns that a bankruptcy petition has been
filed with respect to a debtor, before proceeding with further
collection action, the Commission may immediately seek legal advice
from its counsel concerning the impact of the Bankruptcy Code on any
pending or contemplated collection activities. Unless the Commission
determines that the automatic stay imposed at the time of filing
pursuant to 11 U.S.C. 362 has been lifted or is no longer in effect, in
most cases collection activity against the debtor should stop
(1) After seeking legal advice, a proof of claim will be filed in most
cases with the bankruptcy court or the Trustee. The Commission will
refer to the provisions of 11 U.S.C. 106 relating to the consequences
on sovereign immunity of filing a proof of claim.
(2) If the Commission is a secured creditor, it may seek relief from
the automatic stay regarding its security, subject to the provisions
and requirements of 11 U.S.C. 362.
(3) Offset is stayed in most cases by the automatic stay. However, the
Commission will determine from its counsel whether its payments to the
debtor and payments of other agencies available for offset may be
frozen by the Commission until relief from the automatic stay can be
obtained from the bankruptcy court. The Commission will also determine
from its counsel whether recoupment is available.
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