The transcript of the video follows below for further review.
A. Program Description. This program recovers delinquent debt by offsetting federal payments due the debtor. Offset is accomplished via a centralized matching process at Treasury’s Financial Management Service (FMS). Federal creditor agencies supply FMS with data regarding delinquent debtors (e.g., name, tax ID, debt amount, etc.), which FMS uses to match with payments disbursed by FMS. Where there is a match, the disbursement may be offset up to the amount of the debt. “Offset” means that FMS provides the funds to the creditor agency rather than to the original debtor payee.
Disbursements that are subject to offset include: IRS tax refunds, federal salary, federal retirement, travel reimbursements, vendor/contractor payments, grant payments, government insured/guaranteed loan claim payments, and certain benefit payments (e.g. Social Security retirement and disability payments). For some types of recurring payments, the government may not offset the entire payment. For example, offset of Federal salary payments are limited to 15 percent of disposable pay, and Social Security benefit offsets are limited to 15 percent of the monthly benefit amount. In addition, a debtor’s Social Security, railroad retirement, or black lung benefit payment may not be reduced to less than $750 after offset.
B. Referral Process. The FOC refers debtors to TOP automatically and electronically via DCAMS. Specific eligibility criteria are programmed into DCAMS based on Treasury’s guidelines. TOP referrals are part of a weekly DCAMS cycle. Each week, DCAMS automatically checks debtor criteria, determines which debtors are eligible, and reports them to TOP. DCAMS also sends regular debtor updates to TOP. These updates are used to ensure that HUD and TOP have the same debt balances and the same eligibility status for each debtor.
C. Inappropriate Referrals. Accounts that should not be referred to TOP include: bankrupt, compromised, paid-in-full, partial settlements, unenforceable, investigation pending, and repurchase accounts. FOC staff must ensure that the account is properly coded and updated in DCAMS. In addition to coding each debtor with an appropriate Debtor Status Code, FOC staff should add a “X” or “Z” in the appropriate field in DCAMS to prevent further TOP action when warranted (e.g. bankruptcy, appeal, etc.). Additional details on DCAMS coding may be obtained from the DCAMS User Manual.
D. Due Process. Debtors must be advised of their due process rights before they are referred to TOP. Debtors have the right to: pay the debt voluntarily, inspect and copy HUD’s records relating to the debt, and a review of HUD’s determination that the debt is valid, legally enforceable and past due.
DCAMS automatically issues a TOP Notice of Intent to Collect (NOI) to eligible debtors based on predefined criteria. The letter informs the debtor of his/her due process rights. The debtor has 65 days from the date of the TOP NOI to request a review, provide proof of bankruptcy, or contact HUD to make arrangements to repay the debt. If a debtor fails to take one of these actions and no other status changes are made in DCAMS that would make him/her ineligible, the debtor is electronically referred to TOP for offset.
E. Offset Process. FMS transmits the amount collected through offset to HUD via an electronic process that results in the payment being applied to the case in DCAMS. FMS charges HUD a fee to cover their costs. This fee is passed on to the debtor and is automatically charged to the account in DCAMS as part of the payment posting process.
FMS notifies the debtor and the payment agency when an offset occurs. For recurring payment offsets (e.g. social security benefits, federal pay, etc.), FMS sends the debtor a warning notice before the offset commences. These notices instruct the debtor to contact the creditor agency to resolve any issues related to the offset or to discuss alternatives to offset. The DSR/LSS should respond promptly to a debtor’s questions related to TOP collections and/or to discuss alternatives to offset.
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