[Code of Federal Regulations]
[Title 41, Volume 3]
[Revised as of July 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 41CFR105-55.010]

[Page 405-406]
 
           TITLE 41--PUBLIC CONTRACTS AND PROPERTY MANAGEMENT
 
              CHAPTER 105--GENERAL SERVICES ADMINISTRATION
 
PART 105-55_COLLECTION OF CLAIMS OWED THE UNITED STATES--Table of Contents
 
Sec. 105-55.010  Demand for payment.

    (a) Written demand, as described in paragraph (b) of this section, 
will be made promptly upon a debtor of the United States in terms 
informing the debtor of the consequences of failing to cooperate with 
the General Services Administration (GSA) to resolve the debt. The 
specific content, timing, and number of demand letters (usually no more 
than three, thirty days apart) will depend upon the type and amount of 
the debt and the debtor's response, if any, to GSA's letters, telephone 
calls, electronic mail (e-mail) or Internet inquiries. In determining 
the timing of the demand letter(s), GSA will give due regard to the need 
to refer debts promptly to the Department of Justice for litigation, in 
accordance with Sec. 105-55.031. When necessary to protect the 
Government's interest (for example, to prevent the running of a statute 
of limitations), written demand may be preceded by other appropriate 
actions under this part, including immediate referral for litigation.
    (b) Demand letters will inform the debtor--
    (1) The basis and the amount of the indebtedness and the rights, if 
any, the debtor may have to seek review within GSA (see Sec. 105-
55.011(e));
    (2) The applicable standards for imposing any interest, penalties, 
or administrative costs (see Sec. 105-55.016);
    (3) The date by which payment should be made to avoid late charges 
(i.e., interest, penalties, and administrative costs) and enforced 
collection, which generally will not be more than 30 days from the date 
the demand letter is mailed or hand-delivered; and
    (4) The name, address, and phone number of a contact person or 
office within GSA.
    (c) GSA will exercise care to ensure that demand letters are mailed 
or hand-delivered on the same day they are dated. For the purposes of 
written demand, notification by electronic mail (e-mail) and/or Internet 
delivery is considered a form of written demand notice. There is no 
prescribed format for demand letters. GSA will utilize demand letters 
and procedures that will lead to the earliest practicable determination 
of whether the debt can be resolved administratively or must be referred 
for litigation.
    (d) GSA may include in demand letters such items as the willingness 
to discuss alternative methods of payment; Agency policies with respect 
to the use of credit bureaus, debt collection centers, and collection 
agencies; Agency remedies to enforce payment of the debt (including 
assessment of interest, administrative costs and penalties, 
administrative garnishment, the use of collection agencies, Federal 
salary offset, tax refund offset, administrative offset, and 
litigation); the requirement that any debt delinquent for more than 180 
days will be transferred to the Department of the Treasury for 
collection; and, depending on applicable statutory authority, the 
debtor's entitlement to consideration of a waiver.
    (e) GSA will respond promptly to communications from debtors, within 
30 days whenever feasible, and will advise debtors who dispute debts to 
furnish available evidence to support their contentions.
    (f) Prior to the initiation of the demand process or at any time 
during or after completion of the demand process, if GSA determines to 
pursue, or is required to pursue, offset, the procedures applicable to 
offset will be followed (see Sec. 105-55.011). The availability of 
funds or money for debt satisfaction by offset and GSA's determination 
to pursue collection by offset will release the Agency from the 
necessity of further compliance with paragraphs (a), (b), (c), and (d) 
of this section.
    (g) Prior to referring a debt for litigation, GSA will advise each 
person determined to be liable for the debt that, unless the debt can be 
collected administratively, litigation may be initiated. This 
notification will comply with Executive Order 12988 (3 CFR, 1996 Comp. 
pp. 157-163) and may be given as part of a demand letter under paragraph 
(b) of this section or in a separate document.
    (h) When GSA learns a bankruptcy petition has been filed with 
respect to a debtor, before proceeding with further collection action, 
the Agency will

[[Page 406]]

ascertain the impact of the Bankruptcy Code on any pending or 
contemplated collection activities. Unless the Agency determines the 
automatic stay imposed at the time of filing pursuant to 11 U.S.C. 362 
has been lifted or is no longer in effect, in most cases collection 
activity against the debtor will stop immediately.
    (1) A proof of claim will be filed in most cases with the bankruptcy 
court or the Trustee. GSA will refer to the provisions of 11 U.S.C. 106 
relating to the consequences on sovereign immunity of filing a proof of 
claim.
    (2) If GSA is a secured creditor, it may seek relief from the 
automatic stay regarding its security, subject to the provisions and 
requirements of 11 U.S.C. 362.
    (3) Offset is stayed in most cases by the automatic stay. However, 
GSA will determine whether its payments to the debtor and payments of 
other agencies available for offset may be frozen by the Agency until 
relief from the automatic stay can be obtained from the bankruptcy 
court. GSA also will determine whether recoupment is available.