Types of debt settlement
Primary source
Verbatim text below is from the Electronic Code of Federal Regulations (eCFR), a public-domain U.S. government work. Always verify the current version with the eCFR before relying on it for any legal matter.
Full Text
(a) Compromise. The Agency may compromise a debt owed to the Agency if the requirements of this subpart are met and:
(1) The borrower pays a lump sum as a compromise for the remaining unsecured debt; and
(2) The amount is reasonable based on the Agency's determination of what the borrower can pay to settle the debt.
(b) Adjustment. The Agency may settle a debt owed to the Agency through an adjustment agreement if the requirements of this subpart are met and:
(1) The borrower agrees to pay the adjustment amount for a period of time not to exceed 5 years; and
(2) The amount is reasonable based on the Agency's determination of what the borrower can pay to settle the debt; and
(3) The borrower provides documentation that funds are, or will be, available to pay the adjustment offer through its term.
(c) Cancellation. The Agency may cancel a debt owed to the Agency if the requirements of this subpart are met and the application and supporting documents indicate that the borrower is unable to pay a compromise or adjustment offer.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.