VOLUME 16, CHAPTER 2 - U.S. Department of Defense

DoD 7000.14-R

2B

Financial Management Regulation

Volume 16, Chapter 2 * April 2023

VOLUME 16, CHAPTER 2: "GENERAL INSTRUCTIONS FOR COLLECTION OF DEBT OWED TO THE DOD"

SUMMARY OF MAJOR CHANGES

Changes are identified in this table and also denoted by blue font.

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Unless otherwise noted, chapters referenced are contained in this volume.

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The previous version dated April 2021 is archived.

PARAGRAPH

EXPLANATION OF CHANGE/REVISION

All

Updated hyperlinks and formatting to ensure compliance with administrative instructions.

PURPOSE Revision

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Financial Management Regulation Table of Contents

Volume 16, Chapter 2 * April 2023

VOLUME 16, CHAPTER 2: "GENERAL INSTRUCTIONS FOR COLLECTION OF DEBT OWED TO THE DOD" .................................................................................................................. 1

1.0 GENERAL......................................................................................................................... 5

1.1

Overview .............................................................................................................. 5

1.2

Purpose ................................................................................................................. 5

1.3

Authoritative Guidance ........................................................................................ 5

2.0 GENERAL GUIDANCE................................................................................................... 6

2.1

Prompt Collection of Debt ................................................................................... 6

2.2

Statute of Limitations for Collecting Debts ......................................................... 6

2.3

Method of Payment .............................................................................................. 7

2.4

Return of Property to Settle Indebtedness............................................................ 8

3.0 RECOVERY TOOLS FOR DEBTS ................................................................................. 8

3.1

Common Debt Collection Methods Used by the DoD......................................... 8

3.2

Other Collection and Recovery Tools .................................................................. 8

4.0 DUE PROCESS................................................................................................................. 9

4.1

General ................................................................................................................. 9

4.2

Requirements for Routine Pay Adjustments ...................................................... 10

4.3

Authority to Initiate Collection Before Due Process is Granted ........................ 10

5.0 DEBT NOTIFICATION LETTER.................................................................................. 11

5.1 5.2 5.3 5.4 Official 5.5 5.6

General Requirements for Debt Notification Letter........................................... 11 When to Issue a Debt Notification Letter........................................................... 11 Debt Notification Letters Issued by Disbursing Officers................................... 11 Debt Notification Letters Issued by a Contracting Officer or Other Designated ............................................................................................................................ 11 Content of Debt Notification Letters.................................................................. 11 Duplication of Debt Notification........................................................................ 14

6.0 RESPONDING TO DEBTOR INQUIRIES.................................................................... 14

7.0 VOLUNTARY REPAYMENT OF INDEBTEDNESS .................................................. 14

7.1

Lump-Sum Repayment ...................................................................................... 14

7.2

Voluntary Repayment by Installment ................................................................ 15

8.0 CONSIDERING AND PROCESSING INSTALLMENT AGREEMENTS .................. 16

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Financial Management Regulation Table of Contents (Continued)

Volume 16, Chapter 2 * April 2023

8.1

Proposed Installment Agreement Review Criteria............................................. 16

8.2

Installment Payment Agreement Terms and Processing.................................... 17

8.3

Installment Payment Delinquency ..................................................................... 17

8.4

Review of Installment Agreements .................................................................... 17

9.0 INVOLUNTARY COLLECTION OF DEBT BY SALARY AND ADMINISTRATIVE OFFSET..................................................................................................................................... 18

9.1

General ............................................................................................................... 18

9.2

Salary Offset Under 5 U.S.C. ? 5514 ................................................................. 18

9.3

Collection by Administrative Offset Under 31 U.S.C. ? 3716 .......................... 21

9.4

Additional Statutory Authority for Offset .......................................................... 24

9.5

Cooperation With Other Government Agencies ................................................ 25

10.0 REPORTING DEBT TO CREDIT BUREAUS........................................................... 25

10.1

Authority to Report Debts .................................................................................. 25

10.2

Notification to Debtor of Intent to Report to a Credit Bureau ........................... 26

10.3

Requirements for Reporting Debts to Credit Bureaus ....................................... 26

10.4

Maintenance of Debt Records ............................................................................ 27

11.0 REFERRAL TO THE TREASURY ............................................................................ 27

11.1

General ............................................................................................................... 27

11.2

Cross-Servicing .................................................................................................. 28

11.3

TOP .................................................................................................................... 30

12.0 REFERRAL TO PCA .................................................................................................. 32

12.1

Authority to Use PCA ........................................................................................ 32

12.2

Contracts for PCA Services................................................................................ 32

12.3

Funding PCA Contracts ..................................................................................... 32

13.0 REFERRALS TO THE DOJ FOR LITIGATION ....................................................... 33

13.1

General ............................................................................................................... 33

13.2

Minimum Amount for Referral .......................................................................... 33

13.3

Notification to Debtor ........................................................................................ 34

13.4

Contact With Debtor After Referral................................................................... 34

13.5

Documentation of Debt for the DOJ .................................................................. 34

13.6

Preservation of Evidence.................................................................................... 35

13.7

Discontinuation of DCO Actions ....................................................................... 35

14.0 DEBT COMPROMISE, SUSPENSION, AND TERMINATION .............................. 35

14.1

General ............................................................................................................... 35

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Financial Management Regulation Table of Contents (Continued)

Volume 16, Chapter 2 * April 2023

14.2

Determining Debt Amount for Compromise, Suspension, and Termination..... 35

14.3

Submission to the DOJ Using the CCLR ........................................................... 36

14.4

Compromise ....................................................................................................... 36

14.5

Suspension of Collection Action........................................................................ 39

14.6

Termination of Collection Action ...................................................................... 41

14.7

Debts Involving Violation of Antitrust Laws or Fraud ...................................... 43

15.0 DEBTORS INVOLVED IN BANKRUPTCY PROCEEDINGS ................................ 43

15.1

Active Duty and Reserve Members ................................................................... 44

15.2

Military Retirees................................................................................................. 44

15.3

Federal Civilian Employees ............................................................................... 44

15.4

Commercial Entities ........................................................................................... 44

16.0 BREAK-EVEN ANALYSIS........................................................................................ 44

16.1

Extent of Collection Efforts for Domestic Debts ............................................... 44

16.2

Break-Even Analysis Format ............................................................................. 45

Exhibit 2-1. Civilian Sample Debt Notification for Overpayment of Pay and/or Allowances 46

Exhibit 2-2. Military Sample Debt Notification for Overpayment of Pay and/or Allowances 53

Figure 2-1. Break-Even Analysis ............................................................................................. 59

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Financial Management Regulation CHAPTER 2

Volume 16, Chapter 2 * April 2023

GENERAL INSTRUCTIONS FOR COLLECTION OF DEBT OWED TO THE DOD

1.0 GENERAL

1.1 Overview

The policy and requirements in this chapter apply to administrative actions associated with the collection of debts owed to and collected by the DoD. Additional guidance related to collecting debt from individuals, vendors/contractors, and foreign entities is included in Chapters 3, 5, and 6, respectively. The instructions in this chapter do not apply to the collection of child support or alimony or to commercial, non-DoD debts owed by civilian employees and Service members through garnishment or involuntary allotment. Refer to Volume 7A, Chapters 41 and 43; Volume 7B, Chapters 27 and 28; and Volume 8, Chapter 8 for guidance pertaining to garnishments, involuntary allotments, and tax levies. In addition, this chapter does not apply to antitrust, fraud, tax, or interagency collection issues.

1.2 Purpose

The purpose of this chapter is to provide policy and requirements Debt Collection Offices (DCOs) must follow in the collection of public debts owed to the DoD. These debts include amounts outstanding from civilian employees, Service members, retired personnel, and other individuals.

1.3 Authoritative Guidance

Pursuant to U.S. Department of Treasury (Treasury) requirements, DoD is required to aggressively collect debts in accordance with the following statutes and regulations:

1.3.1. Debt Collection Improvement Act of 1996 (Public Law (P.L.) 104-134, Chapter 10, section 31001);

1.3.2. Debt Collection Act of 1982 (P.L. 97-365);

1.3.3. Federal Claims Collection Act of 1966 (codified at Title 31, United States Code, section 3701 (31 U.S.C. ? 3701) et seq; 5 U.S.C. ? 5514; and 37 U.S.C. ? 1007);

1.3.4. Contract Disputes Act of 1978 (41 U.S.C. ? 7101 et seq.);

1.3.5. Internal Revenue Code provisions regarding the authority to make credits or refunds (26 U.S.C. ? 6402);

1.3.6. Federal Claims Collection Standards (FCCS) (Title 31, Code of Federal Regulations (CFR), parts 900-904 (31 CFR 900-904));

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