TN 17 (02-93)

A. Policy - General

When all reasonable efforts by SSA to collect a debt (or funds misused by a representative payee), or to transfer funds conserved by a former payee have been unsuccessful, enforced collection through civil suit is considered.

A decision to enforce collection is a matter of judgment and each case must be decided on its own merits.

1. What To Consider

In deciding whether to refer a debt, all of the following factors must be considered:

1. The debt must be of sufficient size to warrant additional collection costs; and

2. Civil suit cannot be barred by the statute of limitations; and

3. The Government must be able to prove its case; and

4. The debtor must be located; and

5. There must be income or assets sufficient to repay a substantial portion of the debt within a reasonable period.

2. Fraud Involved

Only if the fraud aspects have been closed by OIG/DOJ or the Integrity Staff, refer for enforced collection.

Contact your local Center for Security and Integrity if you need additional assistance.

3. Bankruptcy Involved

Do not refer for enforced collection if the debtor has filed for bankruptcy or has been granted a discharge in bankruptcy (GN 02215.185, GN 02215.230).

If the debtor is currently involved in bankruptcy proceedings (a discharge has not yet been granted), see GN 02215.190 - GN 02215.200 for filing a claim.

4. Debt Exceeds $100,000

Refer for enforced collection when the debt exceeds $100,000 only if:

• The debtor's whereabouts and financial circumstances are known, and

• Evidence establishes the debtor's ability to repay.

Otherwise, refer the debt claim to DOJ for approval to discontinue collection efforts (GN 02215.235B.).

B. Policy - Specific

1. Size Of Debt

The PC will apply the following dollar criteria according to the size of the debt:

1. If the debtor is a Federal employee, consider referral for all claims of $200 or more.

2. If the debtor is not a Federal employee, consider referral for all debt claims of $3,000 or more (or misused funds of $3,000 or more) if all available means of recoupment (i.e., adjustment, refund and compromise settlement) have been exhausted and fraud is not involved.

3. Consider referral for all claims where the amount of conserved funds is $3,000 or more and the former representative payee ignores requests for refund or refuses to cooperate in transferring such benefits.

4. Consider referral for all claims of $3,000 or more when an estate is involved and a formal claim has not been filed (GN 02215.055B.1., GN 02215.055B.2.)

NOTE: Compromise settlement (GN 02215.105) must be considered before referral for civil suit.

2. Statute Of Limitations

If the statute of limitations has expired, civil suit may not be instituted against a debtor. To ensure that civil suit is not barred, the complaint must be filed within:

1. Six years after the right of action accrues (i.e., within 6 years after the time an overpayment determination has been made); or

2. One year after a final decision has been rendered in an administrative proceeding (i.e., reconsideration, hearing, and/or review by the Appeals Council), whichever is later.

The above time limitation will be extended if facts material to the right of action (a. above) are not and could not reasonably have been known by SSA.

EXAMPLE: A debtor fails to report excess earnings for 1990 and we were unaware of the earnings until an enforcement operation in 1991. The overpayment determination is made in 1991, recovery by civil suit is not barred until 1997.

The time limitation will also be extended if the debtor makes a partial payment of the debt or acknowledges the debt in writing.

EXAMPLE: The initial overpayment determination was made in 1990, and debtor agrees to repay by monthly installments. The last payment was made on June 10, 1992. Recovery by civil suit is not barred until June 9, 1998 (within 6 years after payment default).

In addition, the running of the statute of limitations is suspended during all periods that:

• The debtor is outside the United States, its territories and possessions, the District of Columbia, or the Commonwealth of Puerto Rico; or

• The debtor is exempt from legal process because of infancy (i.e., child under age 18), mental incompetence, diplomatic immunity, or for any other reason, or

• The U.S. is in a state of war declared by Congress.

Such periods may be deducted from the actual total elapsed time.

Where it appears that the time limitation may soon expire, the debt claim must be promptly referred for enforced collection.

NOTE: Whenever there is a delay of more than 1 year between the time overpayment occurs and the time a determination is made (i.e., notice sent), a complete explanation and evidence to support the delay must be provided by the PC when the debt claim is referred to DOJ.

3. Ability To Prove Case

There can be no question as to the fact or amount of a debt. The debtor's age, mental condition or physical condition must not be prejudicial to the outcome of the judgment.

Factors such as the following weaken the chance of successful judgment:

1. Negligence or error by SSA significantly contributed to the overpayment;

2. The debtor is of advanced age (i.e., 70 or over);

3. The debtor is in poor health (i.e., has a serious mental or physical impairment);

4. The circumstances that caused and/or prevented SSA from recovering the debt were not the result of consistent false statements by the debtor or the debtor's failure to cooperate;

5. There has been a change in law and the circumstances which resulted in the overpayment no longer apply;

6. The overpayment is the result of a situation difficult to prove (e.g., common-law marriage; living arrangements where a situation was in a constant state of flux, etc.);

7. There is a question as to the amount of the debt and
   photocopies of the checks in question have not been (or cannot be) obtained.

The above factors are not all-inclusive and the existence of any of the factors does not preclude referral to the RO. The total case circumstances must be considered by the RO, ARC,
Programs Operations and Systems (POS) in deciding whether or not to report a debt to the U.S. Attorney. Therefore, when referring a case, the PC should advise the RO if any of the factors are present.

4. Debtor Located

The debtor's whereabouts must be established. (See GN 02210.213 for efforts to locate a debtor.)

A debtor's actual residence (as opposed to a mailing address) and phone number, if applicable, must be verified within 6 months of referral.

EXAMPLE: A debtor's mailing address is: P.O. Box 2121, Frederick, Md. Prior to referral, obtain the address where the debtor currently resides.

5. Ability To Repay

A debtor's financial ability to repay a debt is essential to enforced collection. Financial evidence must be current and show that the debtor has sufficient income or other assets or property that can be liquidated to permit repayment. See GN 02250.115 - GN 02250.130 for a complete explanation of how to evaluate income and assets.

To determine if there is a reasonable prospect of effecting enforced collection based on income and/or assets, apply the following general rules:

1. Income Only - Refer for enforced collection if income exceeds ordinary and necessary living expenses by at least $50 a month.

2. Income and Assets - Refer for enforced collection if there is a combination of income and assets which would permit recovery of at least 80 percent of the debt (but no less than $3000) within 3 years.

3. If a current SSA-632-BK is unavailable and the debtor is uncooperative and SSA is unable to provide complete financial documentation, a record of earnings greater than $10,000 (unless there is an indication of other types of employment) as shown on the DEQY (or SEQY) will permit referral for enforced collection if all other criteria are met.

4. Federal Employee - If attempts to obtain the debtor's financial circumstances are unsuccessful, information which confirms that the debtor is a Federal employee and the name of the employing Federal agency will permit referral for enforced collection if all other criteria are met.

6. ARC, POS Guidelines

Ensure that the PC has applied the guidelines in GN 02215.150B.1. - GN 02215.150B.5. when the debt is referred for review (GN 02215.170).

A relaxing or tightening of the guidelines may be appropriate on a regional basis as experience with individual U.S. Attorneys dictates.