---
kind: "section"
citation: "7 C.F.R. § 761.406"
title: "7"
number: "761.406"
heading: "Types of debt settlement."
url: "https://uscodex.org/cfr/7/761.406"
---

# §761.406. Types of debt settlement.

- (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.

## Notes

### Source

Source: 85 FR 36691, June 17, 2020, unless otherwise noted.

### Authority

Authority: 5 U.S.C. 301 and 7 U.S.C. 1989.

### Source

Source: 72 FR 63285, Nov. 8, 2007, unless otherwise noted.