---
kind: "section"
citation: "45 C.F.R. § 1177.15"
title: "45"
number: "1177.15"
heading: "Liquidation of collateral."
url: "https://uscodex.org/cfr/45/1177.15"
---

# §1177.15. Liquidation of collateral.

- (a) NEH will liquidate security or collateral through the exercise of a power of sale in the security instrument or a nonjudicial foreclosure, and apply the proceeds to the applicable debt(s), if the debtor fails to pay the debt(s) within a reasonable time after demand and if such action is in the best interest of the United States. Collection from other sources, including liquidation of security or collateral, is not a prerequisite to requiring payment by a surety, insurer, or guarantor unless such action is expressly required by statute or contract.
- (b) When NEH learns that a bankruptcy petition has been filed with respect to a debtor, the agency will seek legal advice from its Office of the General Counsel concerning the impact of the Bankruptcy Code, including but not limited to [11 U.S.C. 362](/usc/11/362.md), to determine the applicability of the automatic stay and the procedures for obtaining relief from such stay prior to proceeding under [paragraph (a)](#a) of this section.

## Notes

### Authority

Authority: 31 U.S.C. 3711, 3716-3719; Pub. L. 104-134; 31 CFR 900-904.

### Source

Source: 86 FR 66965, Nov. 24, 2021, unless otherwise noted.