[Code of Federal Regulations]
[Title 7, Volume 1]
[Revised as of January 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR3.3]

[Page 261]
 
                          TITLE 7--AGRICULTURE
 
PART 3_DEBT MANAGEMENT--Table of Contents
 
               Subpart A_Settlement of Small or Old Debts
 
Sec. 3.3  Settlement of indebtedness.

    (a) Indebtedness will be compromised, adjusted, or canceled, upon 
applicability by the debtor except in those cases where it is found that 
it is legally impossible for the debtor to make application, and upon 
the making of all the following findings:
    (1) That said indebtedness has been due and payable for five years 
or more;
    (2) That the debtor is unable to pay said indebtedness in full and 
has no reasonable prospect of being able to do so; officers of the 
Department shall not make such findings on the basis of mere 
unwillingness to pay on the part of the debtor, or mere financial 
disadvantage to him, but should find that the settlement is the most 
advantageous arrangement possible from the standpoint of the Government 
under the findings prescribed in this part. In no event shall 
cancellation be made unless, in addition to the foregoing requirements, 
there is an advantage in removing the indebtedness from the accounts.
    (3) That the debtor has acted in good faith in an effort to meet his 
obligation; and
    (4) That the principal amount of said indebtedness is not in excess 
of $1,000.
    (b) Indebtedness may also be canceled without application when any 
one of the following circumstances is found:
    (1) The amount of said indebtedness, including interest, is less 
than $10; such efforts of collection have been made as are warranted 
under the circumstances, and the cost of collection or of continued 
maintenance of accounts is deemed greater than the amount of the 
indebtedness;
    (2) The debtor is deceased and there is no reasonable prospect of 
recovering from his estate;
    (3) The debtor's whereabouts has remained unknown for two years and 
there is no reasonable prospect of obtaining collection; heads of 
agencies designated in Sec. 3.5 will prescribe procedures which will 
assure that cancellations on this ground will be made only after a 
diligent effort has been made to locate the debtor, including such 
contact with other agencies of the Department or otherwise as the amount 
of the indebtedness and the circumstances warrant;
    (4) The debtor has been discharged of the indebtedness in any 
proceeding under ``An act to establish a uniform system of bankruptcy 
throughout the United States.''
    (5) It is impossible or impracticable for legal or other reasons to 
obtain the debtor's application but all of the findings required by 
paragraph (a) of this section are made.

[10 FR 807, Jan. 23, 1945, as amended at 12 FR 441, Jan. 22, 1947. 
Redesignated at 13 FR 6903, Nov. 24, 1948, and amended at 21 FR 3213, 
May 16, 1956]