(a) The creditor Labor Department agency shall afford the debtor the
opportunity to (1) repay the debt or (2) enter into a repayment plan
which is agreeable to the agency head (or designee) and is in a written
form signed by such debtor and the creditor agency. The head of the
agency (or designee)
may deem a repayment plan to be abrogated if the debtor should, after
the repayment plan is signed, fail to comply with the terms of the plan.
(b) Agencies have discretion and should exercise sound judgment in
determining whether to accept a repayment agreement in lieu of offset.
The determination should balance the Government's interest in collecting
the debt against fairness to the debtor. If the debt is delinquent and
the debtor has not disputed its existence or amount, an agency should
effect an offset unless the debtor is able to establish that offset
would result in undue financial hardship or would be against equity and
good conscience, or the agency otherwise determines that offset would be
contrary to sound judgment.
