§ 1.1911   Demand for payment.

   (a) Written demand as described in paragraph (b) of this section, and which
   may be in the form of a letter, order, memorandum, or other form of written
   communication, will be made promptly upon a debtor of the United States in
   terms that inform the debtor of the consequences of failing to cooperate to
   resolve the debt. The specific content, timing, and number of demand letters
   depend upon the type and amount of the debt, including, e.g., any notes and
   the terms of agreements of the parties, and the debtor's response, if any,
   to the Commission's letters or telephone calls. One demand letter will be
   deemed sufficient. In determining the timing of the demand letter(s), the
   Commission will give due regard to the need to refer debts promptly to the
   Department of Justice for litigation, in accordance with the FCCS. When
   necessary to protect the Government's interest (for example, to prevent the
   expiration of a statute of limitations), written demand may be preceded by
   other appropriate actions under the FCCS, including immediate referral for
   litigation. The demand letter does not provide an additional period within
   to challenge the existence of, or amount of the non-tax debt if such time
   period has expired under Commission rules or other applicable limitation
   periods. Nothing contained herein is intended to limit the Commission's
   authority or discretion as may otherwise be permitted to collect debts owed.

   (b) The demand letter will inform the debtor of:

   (1) The basis for the indebtedness and the opportunities, if any, of the
   debtor to request review within the Commission;

   (2) The applicable standards for assessing any interest, penalties, and
   administrative costs (§ § 1.1940 and 1.1941);

   (3)  The date by which payment is to be made to avoid late charges and
   enforced collection, which normally will not be more than 30 days from the
   date that the initial demand letter was mailed or hand-delivered; and

   (4) The name, address, and phone number of a contact person or office within
   the Commission.

   (c) The Commission will expend all reasonable effort to ensure that demand
   letters are mailed or hand-delivered on the same day that they are dated. As
   provided  for in any agreement among parties, or as may be required by
   exigent circumstances, the Commission may use other forms of delivery,
   including,  e.g., facsimile telecopier or electronic mail. There is no
   prescribed format for demand letters. The Commission utilizes 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) The Commission may, as circumstances and the nature of the debt permit,
   include in demand letters such items as the Commission's willingness to
   discuss alternative methods of payment; its policies with respect to the use
   of credit bureaus, debt collection centers, and collection agencies; the
   Commission's 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 120 days 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. Where applicable, the
   debtor will be provided with a period of time (normally not more than 15
   calendar  days)  from  the date of the demand in which to exercise the
   opportunity to request a review.

   (e) The Commission will respond promptly to communications from the debtor,
   within 30 days whenever feasible, and will advise debtors who dispute the
   debt that they must 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 the Commission determines to
   pursue, or is required to pursue, offset, the procedures applicable to
   offset  in  § § 1.1912  and 1.1913, as applicable, will be followed. The
   availability of funds or money for debt satisfaction by offset and the
   Commission's determination to pursue collection by offset shall release the
   Commission from the necessity of further compliance with paragraphs (a),
   (b), (c), and (d) of this section.

   (g) Prior to referring a debt for litigation, the Commission 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 follow the requirements of 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. Litigation counsel
   for the Government will be advised that this notice has been given.

   (h) When the Commission learns that a bankruptcy petition has been filed
   with respect to a debtor, before proceeding with further collection action,
   the Commission may immediately seek legal advice from its counsel concerning
   the impact of the Bankruptcy Code on any pending or contemplated collection
   activities. Unless the Commission determines that 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
   should stop immediately.

   (1) After seeking legal advice, a proof of claim will be filed in most cases
   with the bankruptcy court or the Trustee. The Commission 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 the Commission 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, the
   Commission will determine from its counsel whether its payments to the
   debtor and payments of other agencies available for offset may be frozen by
   the Commission until relief from the automatic stay can be obtained from the
   bankruptcy  court. The Commission will also determine from its counsel
   whether recoupment is available.

   [ 69 FR 27848 , May 17, 2004, as amended at  80 FR 43030 , July 21, 2015]

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