---
kind: "section"
citation: "7 C.F.R. § 1951.709"
title: "7"
number: "1951.709"
heading: "Decision on servicing actions."
url: "https://uscodex.org/cfr/7/1951.709"
---

# §1951.709. Decision on servicing actions.

- (a) **Payment in full.** If the recipient agrees with Rural Development's determination or will pay the amount in question, Rural Development may allow a reasonable period of time (usually not to exceed 90 days) for the recipient to arrange for repayment. The amount due will be determined according to [§ 1951.707](/cfr/7/1951.707.md).
- (b) **Continuation with recipient.** If the recipient agrees with Rural Development's determination or is willing to pay the amount in question but cannot repay the unauthorized assistance within a reasonable period of time, continuation is authorized and servicing actions outlined in [§ 1951.711](/cfr/7/1951.711.md) may be taken provided all of the following conditions are met:
  - (1) The recipient did not provide false information as defined in [§ 1951.702](/cfr/7/1951.702.md).
  - (2) **It would be highly inequitable to require prompt repayment of the unauthorized assistance.**
  - (3) Failure to collect the unauthorized assistance in full will not adversely affect Rural Development's financial interest.
- (c) **Appeals.** Appeals resulting from the letter prescribed in [§ 1951.708](/cfr/7/1951.708.md) will be handled according to [7 CFR Part 11](/cfr/7/part11.md). All appeal provisions will be concluded before proceeding with further actions.
- (d) **Liquidation of loan(s) or legal action to enforce collection.** When a case cannot be handled according to the provisions of paragraph [(a)](#a) or [(b)](#b) of this section, or if the recipient refuses to execute the documents necessary to establish an obligation to repay the unauthorized assistance as provided in [§ 1951.711](/cfr/7/1951.711.md), one or more of the following actions will be taken:
  - (1) **Active borrower with a secured loan.**
    - (i) Rural Development will attempt to have the recipient liquidate voluntarily. If the recipient does not agree to voluntary liquidation, or agrees but it cannot be accomplished within a reasonable period of time (usually not more than 90 days), forced liquidation action will be initiated in accordance with applicable provisions of [subpart A of part 1955](/cfr/7/part1955-subpartA.md) of this chapter unless:
      - (A) The amount of unauthorized assistance outstanding, including principal, accrued interest, and any recoverable costs charged to the account, is less than $1,000; or
      - (B) **It would not be in the best financial interest of the Government to force liquidation.**
    - (ii) When all of the conditions of paragraph [(a)](#a) or [(b)](#b) of this section are met, but the recipient does not repay or refuses to execute documents to effect necessary account adjustments according of the provisions of [§ 1951.711](/cfr/7/1951.711.md), forced liquidation action will be initiated as provided in [paragraph (d)(1)(i)](#d-1-i) of this section.
    - (iii) When forced liquidation would be initiated, except that the loan is being handled in accordance with paragraph [(d)(1)(i)(A)](#d-1-i-A) or [(d)(1)(i)(B)](#d-1-i-B) of this section, continuation with the loan on existing terms may be provided.
    - (iv) If the debt is not otherwise resolved, Rural Development will take appropriate debt collection actions in accordance with [7 CFR Part 3](/cfr/7/part3.md), subparts [B](/cfr/7/subpartB.md) and [C](/cfr/7/subpartC.md), and the Federal Claims Collection Standards at [31 CFR Chapter IX](/cfr/31/chIX.md), [Parts 900-904](/cfr/7/part900-904.md).
  - (2) **Grantee, inactive borrower, or active borrower with unsecured loan (such as collection-only, or unsatisfied balance after liquidation).** Rural Development may pursue all reasonable legal remedies.

## Notes

### Source

Source: 71 FR 75852, Dec. 19, 2006, unless otherwise noted.

### Authority

Authority: 5 U.S.C. 301; 7 U.S.C 1932 note; 7 U.S.C. 1989; 31 U.S.C. 3716; 42 U.S.C. 1480.