effective followup, to collect all claims for money or property arising from its activities. will § 1.911 Demand for payment. The Veterans Administration make written demands for the payment of all debts which arise from its activities except in cases where immediate offset is made against current payments. The first demand will advise the debtor of the consequence of his failure to cooperate and of such rights to request waiver or further hearing as may exist in the particular case. Prompt response will be made to all communications from debtors. Where no Veterans Administration right to offset exists and the debtor fails to make satisfactory reply, second and third demands will be made at 30-day intervals unless it is apparent that further demand would be futile or unless prompt suit or attachment is required in anticipation of the departure of the debtor or debtors from the jurisdiction or his or their removal or transfer of assets or the running of the statute of limitations. The Veterans Administration will initiate collection by offset on claims which are liquidated or certain in amount and where the right to offset exists. When previous demand has been made, offset action will be taken when the debtor either agrees to such action or fails to make satisfactory response to the first demand within 30 days. Collections by offset from persons receiving pay or compensation from the Veterans Administration will be effected over a period not greater than the period such pay or compensation may be expected to continue. See 5 US.C. 5514 and 38 U.S.C. 3101. Collection by offset against a judgment obtained by the debtor against the United States will be accomplished in accordance with the Act of March 3, 1875, 18 Stat. 481, as amended, 31 U.S.C. 227. The Veterans Administration will make full use of the cooperative services of other agencies in effecting collections including utilization of the Army Holdup List. § 1.913 Personal interview with debtor. The Veterans Administration will, to the extent feasible, undertake personal interviews whenever requested by debtors and in other cases having regard for the amounts involved and the proximity of agency representatives to the debtors. Demands on debtors who a contractors, brokers, or othe pants in Veterans Administra grams will include notification ure to pay their debts within able time may be cause for s or disqualification to the exten ized by law. Nothing in this intended to be in derogation of visions of 38 U.S.C. 1804 (b) and as implemented by §§ 36.4331 an of this chapter. The failure of ty to honor its obligations in ance with 6 U.S.C. 11 will be re the Treasury Department Prompt and appropriate Vete ministration action will be tal receipt of Treasury Department tion that a surety's certificate o ity to do business with the Fede ernment has been revoked or for § 1.916 Liquidation of collater The Veterans Administration ercise its rights to liquidate se collateral and apply the pro debts due it through use of a sale in the security instrument judicial foreclosure if the debto pay his debt, within a reasona after demand, unless the cost o ing of the collateral will be di tionate to its value or the p circumstances require judicia closure. Collection from other including liquidation of securit lateral, is not a prerequisite to ing payment by a surety or i company unless such action is required by statute or contract. § 1.917 Collection in installme The Veterans Administration lect claims, with interest, wher cable, in one lump sum whenever possible. However, if the debtor is financially unable to pay the indebtedness in one lump sum, payment may be accepted in regular installments. The size and frequency of installment payments will be governed by the size of the debt and the debtor's ability to pay, but should not extend more than 3 years or be less than $10 per month except in only the most unusual circumstances. The Veterans Administration will attempt to obtain an executed confess-judgment note comparable to Department of Justice Form USA 70a whenever the total amount of unsecured deferred installments exceeds $750. Other security for deferred payments may be accepted in appropriate cases. However, installment payments may be accepted notwithstanding the debtor's refusal to execute a confessjudgment note or to give other security. § 1.918 Exploration of compromise. The Veterans Administration will attempt to affect compromises in claims of $20,000 or less exclusive of interest in accordance with the standards set forth in §§ 1.930 through 1.937 in all cases in which it is ascertained that the debtor is financially unable to pay the full amount or in which the litigative risks or the costs of litigation dictate such action. The Veterans Administration may forego prejudgment interest not mandated by statute, contract, or regulation as an inducement to voluntary payment. In such cases, demand letters will inform debtors that prejudgment interest will be collected if suit becomes necessary. When a debt is collected in installments and interest is included, the installment payments will first be applied to the payment of accrued interest and then to principle in accordance with the so called "U.S. Rule", except that on debts arising as a result of defaults on loans guaranteed, insured, or made pursuant to Title 38, United States Code, collections will be applied first to liquidate the principal of the debt, and then to interest obligation, calculated on the basis of declining principal balances without charging interest on interest balances. The foregoing provision of this section is applicable unless a different rule is prescribed by statute, contract, or regulation. [33 F.R. 4140, Mar. 5, 1968] § 1.921 Additional collection Nothing in §§ 1.900 throug intended to preclude the util any other remedy available t erans Administration. STANDARDS FOR COMPROMISE O AUTHORITY: §§ 1.930 to 1.937 is 72 Stat. 1114; 38 U.S.C. 210. SOURCE: 1.930 to 1.937 appear 2614, Feb. 8, 1967, unless other § 1.930 Scope and applicatio The standards contained i through 1.937 apply to the co by the Administrator of Vetera or his designee of claims of the ment which arise from the ac the Veterans Administration, d ceed $20.000 exclusive of inter not been referred to the Ger counting Office or the Depar Justice, and do not arise out ception made by the General A Office in the account of an ac officer. The $20,000 limitation apply to loan guarantee ind under 38 U.S.C., Chapter 37. § 1.931 Inability to pay. The Veterans Administration tempt to compromise claims for the full amount when the debtor unable to pay the full amount reasonable time or the debtor r pay in full and the Government unable to enforce full collection reasonable time. The compro thority contained in §§ 1.930 1.937 will not be utilized to gra table relief denied under waiver ity. All compromise amounts wi reasonable relation to the amour able under enforced collection pr considering the circumstances. promises payable in installments couraged. However, if payme compromise by installments is ne an agreement for the reinstate the prior indebtedness less su thereon and acceleration of the due upon default in the paymen installment should be obtained, 1 with security in the manner set forth in § 1.197, in every case in which this is possible. If the agency's filles do not contain reasonably up-to-date credit information as a basis for assessing a compromise proposal such information may be obtained from the individual debtor by obtaining a statement executed under penalty of perjury showing the debtor's assets and liabilities, income and expense. Similar data may be obtained from corporate debtors by resort to balance sheets and such additional data as seems required. § 1.932 Litigative possibilities. The Veterans Administration will attempt to compromise claims when there is a real doubt as to the Government's ability to prove its case in court for the full amount claimed either because of the legal issues involved or bona fide dispute as to the facts. The amount accepted in compromise will fairly reflect the probability of prevailing on the legal question involved, the probabilities with respect to full or partial recovery of a judgment having due regard to the availability of witnesses and other evidentiary support for the Government claim, and related pragmatic considerations. Proportionate weight will be given the court costs which may be assessed against the Government if it is unsuccessful in litigation, having regard for the litigative risks involved. Cf. 28 U.S.C. 2412, as amended by Public Law 89-507, 80 Stat. 308. § 1.933 Cost of collecting claim. The Veterans Administration will attempt to compromise claims when the cost of collection does not justify en. forced collection of the full amount. The amount accepted in compromise in such cases may reflect an appropriate discount for the administrative and litigative costs of collection, having regard for the time required to effect collection. The cost of collection normally will be a proportionately greatly factor in the settlement of small claims. § 1.934 Joint and several liability. When two or more debtors are jointly and severally liable, the Veterans Administration will proceed against each for the full amount. Care will be exercised that compromise with any one such debtor does not release the agency's claim against the remaining debtors or estab 20-121-74- -5 The Veterans Administration may refer to the General Accounting Office or Department of Justice firm written offers doubt from debtors when there is whether the offers should be accepted. § 1.937 Restrictions. The Veterans Administration will not accept either a percentage of a debtor's profits or stock in a debtor corporation in compromise of a claim. Tax-loss effects will be considered in negotiating compromises with business concerns. STANDARDS FOR SUSPENDING OR TERMINATING COLLECTION ACTION AUTHORITY: 1.940 to 1.943 issued under 72 Stat. 1114; 88 U.S.C. 210. SOURCE: 1.940 to 1.948 appear at 32 F.R. 2615, Feb. 8, 1967, unless otherwise noted. § 1.940 Scope and application. The standards contained in §§ 1.940 through 1.944 apply to the suspension or termination of Veterans Administration collection action on claims which do not exceed $20,000 exclusive of interest and which have not been referred to the General Accounting Office or to the Department of Justice for litigation. § 1.941 Suspension of collection activity. Suspension of collection activity constitutes merely the temporary cessation of collection effort. The Veterans Administration will suspend collection activity on all claims where the debtor cannot be located after diligent effort and there is reason to believe that future collection action may be sufficiently productive to justify periodic review and action on the claim having consideration for its size and the amount which may be realized thereon. Collection action may be suspended temporarily on a claim when the debtor owns no substantial equity in realty and is unable to make payments on the Government's claim or effect a compromise thereof at the time but his future prospects justify retention of the claim for periodic review and action and (a) the applicable statute of limitations has been tolled or started running anew or (b) future collection can be effected by offset notwithstanding the statute of limitations. Suspension of collection activity as to a particular debtor will not defer the early liquidation of any security for the debt. Every effort will be made to locate missing debtors sufficiently in advance of the bar of any applicable statute of limitations to permit the timely filing of suit if such action is warranted. If the missing debtor has signed a confess-judgment note and is in default, referral of the note for entry of judgment will not be delayed because of his missing status. (b) Inability to locate debtor. The debtor cannot be located, no security remains to be liquidated, the applicable statute of limitations has run, and the prospects of collecting by offset are too remote. (c) Decease of debtor. The debtor is determined to be deceased and the Government has no prospect of collecting from his estate. (d) Cost will exceed recovery. The cost of further collection effort is likely to exceed the amount recoverable. (e) Claim legally without merit. Collection action should be terminated on a claim whenever it is determined that the claim is legally without merit. (f) Claim cannot be substantiated by evidence. The Veterans Administration will terminate collection action on once asserted claims because of lack of evidence or unavailability of witnesses only in cases in which court action appears the sole remaining recourse. ing Office only when the amount exceeds $20,000 exclusive of interest or the particular circumstances indicate the capacity of that office to exert collection pressure not available to the Veterans Administration. Claims will be referred to the Department of Justice whenever required to renew a judgment or otherwise protect the interests of the Government. REFERRALS TO GAO OR JUSTICE DEPARTMENT FOR LITIGATION AUTHORITY: § 1.950 to 1.954 issued under 72 Stat. 1114; 38 U.S.C. 210. SOURCE: 1.950 to 1.954 appear at 32 FR. 2615, Feb. 8, 1967, unless otherwise noted. § 1.950 Prompt referral. The Veterans Administration will refer promptly to the General Accounting Office or to the Department of Justice as appropriate claims which are not compromised or on which collection action is not suspended or terminated in accordance with §§ 1.900 through 1.954. Due consideration will be given the timing of referrals in relation to any limitations on the timing of suits against debtors. § 1.951 Current address of debtor. All referrals will include the current address of the debtor or the name and address of the agent for a corporation upon whom service may be made when such addresses are known to the Veterans Administration. Referrals in which the current address of any party is unknown will include a listing of all prior known addresses and a statement of the steps taken to locate each such party. § 1.952 Credit data. (a) Every claim referred by the Veterans Administration to other authority will include reasonably current information concerning the debtor's ability to pay. (b) Such credit data may take the form in order of preferences of: (1) A commercial credit report. (2) A Veterans Administration investigative report showing the debtor's assets and liabilities, income and expenses. (3) An individual debtor's statement executed under penalty of perjury reflecting his assets and liabilities and income and expenses. (c) Credit data will be omitted in referral actions for foreclosure action and in other cases where it is clearly irrelevant to the Government's case. 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 PART 2-DELEGATIONS OF AUTHORITY Delegation of authority to employees to issue subpenas, etc. Delegation of authority to employees Delegation of authority to order paid Delegation of authority to authorize al- 2.9-2.49 [Reserved] 2.50 Department, staff office, and field station heads are authorized to designate employees to certify copies of records and papers in the custody of the Veterans Administration. 2.51 Delegation of authority to certain employees to exercise the power of the Administrator to waive stated procedural (nonsubstantive) requirements of the loan guaranty regulations. 2.52 Delegation of authority to certain employees to exercise certain powers and functions of the Administrator with respect to the guaranty or insurance of loans. The authority hereby delegated to these employees may, with the approval of the Chief Benefits Director, be redelegated. 59 Sec. 2.53 Delegation of authority to certain employees to exercise certain powers and functions of the Administrator with respect to assisting eligible veterans to acquire specially adapted housing. 2.54 Delegation of authority to certain employees to exercise the power of the Administrator to waive procedural (nonsubstantive) requirements of the direct loan regulations. 2.55 Delegation of authority to certain employees to exercise certain powers and functions of the Administrator with respect to the making of direct loans. The authority hereby delegated to these employees may, with the approval of the Chief Benefits Director, be redelegated. 2.56 Directors of Veterans Administration hospitals authorized to appoint boards of medical officers, consisting of at least three qualified physicians, one of whom must be qualified in treatment of mental disorders, to determine whether members of uniformed services who are being furnished medical care in our hospitals are mentally capable of managing their own affairs. 2.57 2.62 2.63 2.64 2.65 Chief Attorneys authorized to release funds from Personal Funds of Patients for the needs of veterans and their dependents including amounts fixed by statute or valid administrative regulations as the cost of current maintenance of veterans in public institutions other than Veterans Administration institutions. The Contract Appeals Board authorized by Administrator to ascertain the facts and circumstances and to render and publish final decisions on appeals entered by contractors from decisions of Veterans Administration contracting officers in accordance with contract terms and §§ 1.770 through 1.775. The Contract Appeals Board and its individual members authorized by Administrator to take such actions as may be necessary to hear and decide appeals including the administering of oaths and affirmations, the taking of testimony and affidavits, the conduct of hearings, the dismissal of proceedings and ordering the production of documents and other evidence. The Contract Appeals Board authorized to take official notice of facts within general knowledge and to decide all questions necessary for complete adJudication of appeals. The Contract Appeals Board authorized to require Veterans Administration contracting officers and other Veterans Administration officials having responsibility for or oficial knowl |