Title 7

SECTION 761.404

761.404 Eligibility.

§ 761.404 Eligibility.

(a) A borrower is eligible for debt settlement if the borrower:

(1) Meets the requirements for the particular type of debt settlement under this part; and

(2) Submits a complete application for debt settlement as specified in § 761.405.

(b) All parties liable for the debt must submit a complete application with the following exceptions:

(1) The applicable information required in § 761.405 can be provided by the administrator or executor of the Estate, heir, or other authorized person who can sign the debt settlement application; or compiled by FSA staff when a signature cannot be obtained.

(2) The debt may be settled when the borrower has no known assets or income from which collection can be made, has disappeared and cannot be located without undue expense, and there is no security remaining for the debt.

(3) In cases where the full amount of the unsecured debt cannot be collected in a reasonable time by legal action or through enforced collection proceedings, the Agency may consider a debt settlement offer submitted by a borrower without requiring a complete application. When evaluating these offers, the Agency will consider the likelihood of the debtor obtaining a larger income or additional assets, including inheritance prospects within 5 years, from which legal or enforced collection could be made.

(1) The borrower is indebted on another active FLP loan that the borrower cannot or will not debt settle; or

(2) The debt has been referred to the OIG, OGC, or Justice because of suspected civil or criminal violation, unless investigation was declined or advice was provided that the debt can be canceled, compromised, or adjusted.