Pursuant to 31 U.S.C. §§ 3711(g)(1)(B), 3711(g)(4), and 3711(g)(5), and the authority delegated to the Treasury Department’s Bureau of Fiscal Service (BFS) by the U.S. Department of Justice, BFS is authorized to take appropriate action to collect or compromise transferred debts.
With regard to debts that have been transferred to BFS for debt collection services, BFS has the same authority available to the head of the federal creditor agency to compromise transferred debts or collect transferred debts in installments.
In addition, the Department of Justice has delegated to BFS the authority to compromise debts with a principal balance of up to $500,000. BFS may accept proposed compromises of debts with a principal balance of over $500,000 only with the approval of the Department of Justice.
BFS may collect and/or compromise debts in accordance with applicable Federal law, including the Federal Claims Collection Standards (31 CFR Parts 900-904). Prior to transferring debts, the federal creditor agency must provide to BFS a detailed description of any agency or debt-specific laws, policies, and procedures that govern the compromise and/or collection of its debts. Therefore, any federal creditor agency debts, including SBA debts, that have been transferred to BFS, are eligible for compromise by the Treasury’s BFS, in accordance with applicable federal law and supporting regulations.
A BFS offer in compromise (OIC) is a written settlement agreement with the BFS for less than the full amount owed. Generally, it is based on the argument that you do not have the financial ability to pay back the federal creditor agency debt (along with the administrative fees) in full within a reasonable amount of time.
The BFS are required to use the same formula that the original federal creditor agency (such as the SBA) to determine an acceptable settlement amount. A cash offer in compromise can be made. Short term and longer term deferred repayment plans are also available if you are unable to pay the settlement amount in full.
You may qualify for an OIC and not know it. Treasury’s BFS employees generally will not tell you that you qualify or that a compromise offer proposal is even available for consideration. Or, a seemingly friendly BFS official may offer to “help” you prepare and process your own OIC only to discover the whereabouts of your remaining personal assets. Then, the BFS will use its own formula against you, reject your OIC and demand payment in full or simply seize your recently discovered assets through various collection tools, such as Administrative Wage Garnishment, Treasury Offset Program levy, or referral to the Department of Justice or Private Litigation Counsel for collection litigation in federal or state court.
Thus, it is important to find out if a BFS OIC is even an option as this may be the only vehicle that can possibly save you a lot of money. If you qualify, we prepare your OIC and aggressively advocate your interests with the BFS until a final decision is reached.
Contact us today for a free Case Evaluation.