NOTICE OF INVOLUNTARY ADMINISTRATIVE
SALARY OFFSETS UNDER THE DEBT COLLECTION ACT

[__date ]

[__name ]

[__street__]

[__city, state, ZIP ]

[__name of debtor ]:

On [__date of previous letter__], you were notified by letter of our determination that you owe the Postal Ser­vice $[__amount__]. As we noted in our earlier letter, this debt is based on [__briefly describe how debt arose__].

Our records indicate that you have not acted to repay this debt. Accordingly, this letter provides notice of the Postal Service’s intention to collect this debt by deducting 15 percent of your “disposable pay”¹ each pay period (or, for a bargaining unit employee, 20 percent of gross pay each pay period, whichever amount is lower when the salary offset is started). In your case, this will amount to deductions of approximately $[__amount__] from each paycheck beginning on [__date deductions are scheduled to begin-generally 30 days from the date the employee receives this notice__]. These deductions will continue until the debt is collected; we estimate that this should take approximately [number of] pay periods.

If you feel our determination of the existence or amount of this debt is incorrect, or if you believe the deduc­tions set forth above would impose a “severe financial hardship”² on you and your spouse and dependents, you may take one or more of the measures detailed in the enclosed Statement of Debtor’s Rights and Respon­sibilities. Unless you have a sound basis for contesting the Postal Service’s determinations concerning this matter, you should make arrangements immediately to repay this debt.

[__signature ]

[__name ]

[__title of installation head__]

[__work address__]

[__telephone number w/area code ]

Enclosures

Statement of Debtor’s Rights and Responsibilities

Rules of Procedure Governing Hearings Under the Debt Collection Act

1. The term disposable pay refers to that part of an employee’s salary remaining after all required deductions (normal retire­ment contributions, FICA and Medicare insurance taxes, federal income tax, state and local income taxes, and employee-paid federal health insurance premiums) are made.

2. The term severe financial hardship refers to an employee’s inability to meet the material needs of the employee and his or her spouse and dependents because of offsets against pay. These essential material needs are food, housing, clothing, transportation, medical care, and any exceptional expenses.

Statement of Debtor’s Rights and Responsibilities

1. Request for Records. At any time after receiving this notice of the Postal Service’s intention to collect a debt through involuntary salary offsets and before a requested hearing is held, you may request copies of any postal records that you have not previously received, by contacting, in writing, [__name of appropriate official__] at [__address__]. You will receive any requested records within 5 calendar days of the date your request is received by the Postal Service.

2. Payment in Full. If you acknowledge the validity of the Postal Service’s claim and wish to repay the entire debt, you may, at any time after receiving this notice of the Postal Service’s intention to collect a debt through involuntary offsets, submit a check or money order, with your Social Security number on its face, for the full amount due, to [__name of appropriate official__ ] at [__address__].

3. Consent to Offsets. If you acknowledge the validity of the Postal Service’s claim and would like to consent to offsets of 15 percent or more of your disposable pay (or, for a bargaining unit employee, 20 percent of gross pay, whichever amount is lower when the salary offset is started), you should contact [__name of appropriate official__] at [__address__] and complete PS Form 3239, Payroll Deduction Authorization to Liquidate Postal Service Indebtedness. You may agree to salary offsets in the amount proposed by the Postal Service, or some greater amount, at any time after you receive notice of the Postal Service’s inten­tion to collect a debt through involuntary salary offsets.

4. Alternative Offset Schedule. If you acknowledge the debt, but believe that the proposed deductions of 15 percent of disposable pay (or, for a bargaining unit employee, 20 percent of gross pay, whichever amount is lower when the salary offset is started), would impose a “severe financial hardship”¹ on your family, you may propose an alternative offset schedule.

a. Your proposed alternative offset schedule must be submitted to [__name of appropriate official__] at [__address__], along with a written statement, and supporting documentation, stating your reasons for believing the deductions proposed by the Postal Service would result in a “severe financial hardship.” Your proposal must include (1) the amount to be paid each pay period, (2) the number of pay periods it would take to repay the debt, and (3) the date the first payment would be made. In addition, the sup­porting documents must show, for you and your spouse and dependents, for the 1-year period preced­ing the Postal Service’s notice and for your proposed repayment period, (1) your total family income, assets, and liabilities; (2) number of dependents; and (3) total expenses for food, housing, clothing, transportation, medical care, and any exceptional expenses. You should be careful to provide all infor­mation in your possession relating to this debt so that the Postal Service may make an informed deci­sion on your request for an alternative offset schedule. You may submit your proposed alternative repayment schedule at any time after receiving this notice of the Postal Service’s intention to collect an outstanding debt through salary offsets.

b. Based upon the material you submit and postal records relating to the debt, the Postal Service will con­sider (1) the extent to which your assets and those of your spouse and dependents are available to meet your family’s essential material expenses and to repay the postal debt, (2) whether your essential mate­rial expenses have been minimized as much as possible, and (3) the extent to which you and your spouse and dependents can borrow to finance your essential expenses and to repay the debt. An alter­native offset schedule will be approved only if it provides for installment payments that bear a reason­able relationship to the size of the debt and your ability to pay. Generally, an alternative offset schedule should provide for installment payments of no less than 10 percent of disposable pay per pay period, and for a repayment period of 26 pay periods or less.

c. You will be notified of the Postal Service’s decision regarding your proposed repayment schedule within 15 calendar days of the date it is received.

1. The term severe financial hardship refers to an employee’s inability to meet the material needs of the employee and his or her spouse and dependents because of offsets against pay. These essential material needs are food, housing, cloth­ing, transportation, medical care, and any exceptional expenses.

5. Petition for a Hearing. To request a hearing on the Postal Service’s determination of the existence or amount of the debt, or on the Postal Service’s proposed involuntary offset schedule, you must file a written petition for a hearing in accordance with the requirements of 39 CFR 961.4. (A copy of Part 961 of 39 CFR. is enclosed.) Your hearing petition must be filed with the RECORDER, JUDICIAL OF­FICER DEPT, US POSTAL SERVICE, 2101 WILSON BLVD, STE 600, ARLINGTON VA 22201-3078, on or before the fifteenth calendar day following your receipt of this notice. A timely request for a hearing will stay the commencement of the collection of the debt.

Note: While you may request a hearing and pursue one of the other available options, your hearing petition must be filed within the required time period. If questions relating to this debt are resolved before the hearing is held, your petition may be withdrawn.

6. Failure to Act. If you do not exercise any of the rights set forth above, the Postal Service will proceed with its plans to initiate the proposed offsets 30 days from the date you receive this notice.

39 CFR PART 961–RULES OF PRACTICE IN PROCEEDINGS UNDER SECTION 5 OF THE DEBT COLLECTION ACT

Section

961.1 Authority for rules.

961.2 Scope of rules.

961.3 Definitions.

961.4 Employee petition for a hearing.

961.5 Effect of filing a petition.

961.6 Filing, docketing, and serving documents; computation of time; representation of parties.

961.7 Answer to petition.

961.8 Hearing Official authority and responsibilities.

961.9 Opportunity for oral hearing.

961.10 Effect of Hearing Official’s decision; motion for reconsideration.

961.11 Consequences for failure to comply with rules.

961.12 Ex parte communications.

Authority: 39 U.S.C. 204, 401; 5 U.S.C. 5514.

Sec. 961.1 Authority for rules. These rules are issued by the Judicial Officer pursuant to authority delegated by the

Postmaster General.

Sec. 961.2 Scope of rules. The rules in this part apply to the hearing provided by section 5 of the Debt Collection Act of 1982, as amended, 5 U.S.C. 5514, challenging the Postal Service’s determination of the existence or amount of an employee debt to the Postal Service, or of the terms of the employee’s debt repayment schedule. In addition, these rules apply to a hearing under section 5 of the Debt Collection Act when an Administrative Law Judge or an Administrative Judge in the Judicial Officer Department is designated as the Hearing Official for a creditor Federal agency other than the Postal Service pursuant to an agreement between the Postal Service and that agency. In such cases, all references to Postal Service within these rules shall be construed to refer to the creditor Federal agency involved.

Sec. 961.3 Definitions.

As used in this part:

(a) Employee refers to a current employee of the Postal Service who is alleged to be indebted to the Postal Service; or to an employee of another Federal agency who is alleged to be indebted to that other creditor Federal agency and whose hearing under section 5 of the Debt Collection Act is being conducted under these rules.

(b) General Counsel refers to the General Counsel of the Postal Service, and includes a designated representative.

(c) Hearing Official refers to an Administrative Law Judge qualified to hear cases under the Administrative Proce­dure Act, an Administrative Judge appointed under the Contract Disputes Act of 1978, or other qualified person not under the control or supervision of the Postmaster General, who is designated by the Judicial Officer to con­duct the hearing under section 5 of the Debt Collection Act of 1982, as amended, 5 U.S.C. 5514.

(d) Judicial Officer refers to the Judicial Officer, Associate Judicial Officer, or Acting Judicial Officer of the United States Postal Service.

(e) Notice of Involuntary Administrative Salary Offsets Under the Debt Collection Act refers to the formal written notice required by section 5 of the Debt Collection Act, including the provision of notice of the procedures under this Part, before involuntary collection deductions can be taken from an employee’s salary.

(f) Postmaster/Installation Head refers to the Postal Service official who is authorized under the Postal Service Employee and Labor Relations Manual to make the initial determination of employee indebtedness and to issue the “Notice of Involuntary Administrative Salary Offsets Under the Debt Collection Act.”

(g) Recorder refers to the Recorder, Judicial Officer Department, U.S. Postal Service, located at 2101 Wilson Blvd., Suite 600, Arlington, VA 22201-3078. The Recorder’s telephone number is (703) 812-1900, and the fax number is (703) 812-1901.

Sec. 961.4 Employee Petition for a hearing.

(a) If an employee desires a hearing, prescribed by section 5 of the Debt Collection Act, to challenge the Postal Ser­vice’s determination of the existence or amount of a debt, or to challenge the involuntary repayment terms pro­posed by the Postal Service, the employee must file a written, signed petition with the Recorder, on or before the fifteenth (15th) calendar day following the employee’s receipt of the Postal Service’s “Notice of Involuntary Ad­ministrative Salary Offsets Under the Debt Collection Act.” The Hearing Official, in his or her discretion may waive this deadline upon a demonstration of good cause. In the event that the Postal Service initiated involuntary ad­ministrative salary offsets without having issued a Notice as required by the Debt Collection Act, the Hearing Of­ficial, in his or her discretion, may retain authority to resolve the debt assessment as if a Notice had been issued, and may order the Postal Service to return any improperly offset money.

(b) The hearing petition shall include the following:

(1) The words, “Petition for Hearing Under the Debt Collection Act,” prominently captioned at the top of the first page;

(2) The name of the employee, the employee’s work address, home address, work telephone number, home tele­phone number, and email address, if any, or other address and telephone number at which the employee may be contacted during business hours;

(3) A statement of the date on which the employee received the “Notice of Involuntary Administrative Salary Off­sets Under the Debt Collection Act,” and a copy of the Notice;

(4) A statement indicating whether the employee challenges: (i) the existence of the debt identified in the Notice of Involuntary Administrative Salary Offsets; (ii) the amount of the debt identified in the Notice; and/or (iii) the involuntary repayment terms identified by the Postal Service in the Notice. For each challenge, the employee's petition shall indicate the basis of the employee's disagreement. The employee should identify and explain the facts, evidence, and legal arguments which support his or her position;

(5) Copies of all records in the employee’s possession which relate to the debt; and

(6) If an employee contends that the Postal Service’s proposed offset schedule would result in a severe financial hardship on the employee, his or her spouse, and dependents, the employee shall identify an alternative offset schedule. As directed by the Hearing Official, the employee shall provide a statement and supporting docu­ments indicating the employee’s financial status. This statement should address total income from all sources; assets; liabilities; number of dependents; and expenses for food, housing, clothing, transportation, medical care, and exceptional expenses, if any.

(c) The employee shall file with the Recorder any additional information directed by the Hearing Official.

Sec. 961.5 Effect of filing a petition. Upon receipt and docketing of the employee’s petition for a hearing, further collec­tion activity by the Postal Service must cease, as required by section 5 of the Debt Collection Act until the petition is resolved by the Hearing Official.

Sec. 961.6 Filing, docketing, and serving documents; computation of time; representation of parties.

(a) Filing. All documents relating to the Debt Collection Act hearing proceedings must be filed by the employee or the General Counsel’s designee with the Recorder. (Normal Recorder office business hours are between 8:45 a.m. and 4:45 p.m., Eastern Time.) Unless otherwise directed by the Hearing Official, the party filing a document shall send a copy thereof to the opposing party.

(b) Docketing. The Recorder will maintain a record of Debt Collection Act proceedings and will assign a docket num­ber to each such case. After notification of the docket number, the employee and the Postal Service’s represen­tative should refer to it on any further filings regarding the petition.

(c) Time computation. A filing period under the rules in this Part excludes the day the period begins, and includes the last day of the period unless the last day is a Saturday, Sunday, or legal holiday, in which event the period runs until the close of business on the next business day. Requests for extensions of time shall be made in writing prior to the date on which the submission is due, state the reason for the extension request, represent that the moving party has contacted the opposing party about the request, or made reasonable efforts to do so, and in­dicate whether the opposing party consents to the extension. Requests for extensions of time submitted after the date on which the submission was due shall explain why the moving party was unable to request an extension prior to the deadline.

(d) Representation of parties. The representative of the Postal Service, as designated by the General Counsel, shall file a notice of appearance as soon as practicable, but no later than the date for filing the answer. If an employee has a representative, he or she also shall file a notice of appearance as soon as practicable, and further trans­missions of documents and other communications by and with the employee shall be made through his or her representative.

Sec. 961.7 Answer to Petition. Within 15 days from the date of receiving the petition, the Postal Service’s representa­tive shall file an answer to the petition, and attach all available relevant records and documents in support of the Postal Service’s debt claim, and/or the administrative salary offset schedule proposed by the Postal Service for collecting any such claim. The answer shall provide a clear and thorough description of the basis for the Postal Service’s determina­tion of the alleged debt, its calculation of the amount of the alleged debt, and/or its proposed offset schedule.

Sec. 961.8 Hearing Official authority and responsibilities. The Hearing Official’s authority includes, but is not limited to, the following:

(a) Ruling on all motions or requests by the parties.

(b) Issuing notices, orders, or memoranda to the parties concerning the hearing proceedings.

(c) Conducting telephone conferences with the parties to expedite the proceedings. The Hearing Official will pre­pare a Memorandum of Telephone Conference, which shall be transmitted to both parties and which serves as the official record of that conference.

(d) Determining whether an oral hearing shall be conducted, the type of oral hearing to be held, and setting the place, date, and time for such hearing.

(e) Administering oaths or affirmations to witnesses.

(f) Conducting the hearing in a manner to maintain discipline and decorum while assuring that relevant, reliable, and probative evidence is elicited on the issues in dispute, but irrelevant, immaterial, or repetitious evidence is ex­cluded. The Hearing Official in his or her discretion may examine witnesses to ensure that a satisfactory record is developed.

(g) Establishing the record in the case. The weight to be attached to any evidence of record will rest within the dis­cretion of the Hearing Official. Except as the Hearing Official may otherwise order, no proof shall be received in evidence after completion of an oral hearing or, in cases submitted on the written record, after notification by the Hearing Official that the record is closed. The Hearing Official may require either party, with appropriate notice to the other party, to submit additional evidence on any relevant matter.

(h) Granting reasonable time extensions or other relief for good cause shown in the Hearing Official’s sole discretion.

(i) Issuing the final decision. The decision must include the determination of the amount and validity of the alleged debt and, where applicable, the repayment schedule.

Sec. 961.9 Opportunity for oral hearing. An oral hearing shall be conducted in the sole discretion of the Hearing Official. An oral hearing may be conducted in-person, by telephone, by video conference, or other appropriate means as directed by the Hearing Official. When the Hearing Official determines that an oral hearing shall not be conducted, the decision shall be based solely on the written submissions. The Hearing Official shall arrange for the recording and tran­scription of an oral hearing, which shall serve as the official record of the hearing. In the event of an unexcused absence, the hearing may proceed without the participation of the absent party.

Sec. 961.10 Effect of Hearing Official’s decision; motion for reconsideration.

(a) After the receipt of written submissions or after the conclusion of the hearing and the receipt of post-hearing briefs, if any, the Hearing Official shall issue a written decision, which shall include the findings of fact and con­clusions of law relied upon.

(b) The Hearing Official shall send each party a copy of the decision. The Hearing Official’s decision shall be the final administrative determination on the employee’s debt or repayment schedule. No reconsideration of the decision will be allowed unless a motion for reconsideration is filed within 10 days from receipt of the decision and shows good cause for reconsideration. Reconsideration will be allowed only in the discretion of the Hearing Official. A motion for reconsideration by the employee will not operate to stay a collection action authorized by the Hearing Official’s decision.

Sec. 961.11 Consequences for failure to comply with rules.

(a) The Hearing Official may determine that the employee has abandoned the right to a hearing, and that adminis­trative offset may be initiated if the employee files his or her petition late without good cause; or files a withdrawal of the employee’s petition for a hearing.

(b) The Hearing Official may determine that the administrative offset may not be initiated if the Postal Service fails to file the answer or files the answer late without good cause; or files a withdrawal of the debt determination at issue.

(c) If a party fails to comply with these Rules or the Hearing Official's orders, the Hearing Official may take such action as he or she deems reasonable and proper under the circumstances, including dismissing or granting the petition as appropriate.

Sec. 961.12 Ex parte communications. Ex parte communications are not allowed between a party and the Hearing Offi­cial or the Official’s staff. Ex parte communication means an oral or written communication, not on the public record, with one party only with respect to which reasonable prior notice to all parties is not given, but it shall not include requests for status reports or procedural matters. A memorandum of any communication between the Hearing Official and a party will be transmitted to both parties.