Untitled

Federal Debt Collection Procedures

Act of 1990

* Act of November 29, 1990 (P.L. 101-647, 104 Stat. 4933; 28 U.S.C. 3001-3015, 3101-3105, 3201-3206, 3301-3308)

Sec. 3611. Title 28 of the United States Code is amended by inserting after chapter 175 the following:

CHAPTER 176-FEDERAL DEBT COLLECTION PROCEDURE

Subchapter A - Definitions and General Provisions

Applicability of Chapter

Sec. 3001. (a) In general.-Except as provided in subsection (b), the chapter provides the exclusive civil procedures for the United States-

(1) to recover a judgment on a debt; or

(2) to obtain, before judgment on a claim for a debt, a remedy in connection with such claim.

(b) Limitation.-To the ex-tent that another Federal law speci-fies procedures for recovering on a claim or a judgment for a debt arising under such law, those proce-dures shall apply to such claim or judgment to the extent those proce-dures are inconsistent with this chapter.

(c) Amounts owing oth-er than debts.-This chapter shall not apply with respect to an amount owing that is not a debt or to a claim for an amount owing that is not a debt.

Definitions

Sec. 3002. As used in this chapter-

(1) "Counsel for the United States" means-

(A) a United States attor-ney, an assistant United States attor-ney d-esignated to act on behalf of the United States attorney, or an attor-ney with the United States Depart-ment of Justice or with a Federal agency who has litigation authority; and

(B) any private attorney authorized by contract made in accordance with section 3718 of title 31 to conduct litigation for collection of debts on behalf of the United States.

(2) "Court" means any court created by the Congress of the Unit-ed States, excluding the United States Tax Court.

(3) "Debt" means-

(A) an amount that is ow-ing to the United States on account of a direct loan, or loan insured or guar-anteed, by the United States; or

(B) an amount that is ow-ing to the United States on account of a fee, duty, lease, rent, service, sale of real or personal property, overpayment, fine, assessment, penalty, restitution, damages, interest, tax, bail bond forfeiture, reimbursement, recovery of a cost incurred by the United States, or other source of indebtedness to the United States, but that is not owing under the terms of a contract originally entered into by only persons other than the United States;

and includes any amount owing to the United States for the benefit of an Indian tribe or individual Indian, but excludes any amount to which the United States is entitled under section 3011(a).

(4) "Debtor" means a per-son who is liable for a debt or against whom there is a claim for a debt.

(5) "Disposable earnings" means that part of earnings remain-ing after all deductions required by law have been withheld.

(6) "Earnings" means com-pensation paid or payable for per-sonal services, whether denominated as wages, salary, commission, bo-nus, or otherwise, and includes periodic payments pursuant to a pension or retirement program.

(7) "Garnishee" means a person (other than the debtor) who has, or is reasonably thought to have, possession, custody, or control of any property in which the debtor has a substantial nonexempt interest, including any obligation due the debtor or to become due the debtor, and against whom a garnishment under section 3104 or 3205 is issued by a court.

(8) "Judgment" means a judg-ment, order, or decree entered in favor of the United States in a court and arising from a civil or criminal proceeding regarding a debt.

(9) "Nonexempt disposable earnings" means 25 percent of dis-posable earnings, subject to section 303 of the Consumer Credit Protec-tion Act.

(10) "Person" includes a natu-ral person (including an individ-ual Indian), a corporation, a partner-ship, an unincorporated association, a trust, or an estate, or any other public or private entity, including a State or local government or an Indian tribe.

(11) "Prejudgment remedy" means the remedy of attachment, receivership, garnishment, or sequestration authorized by this chapter to be granted before judg-ment on the merits of a claim for a debt

(12) "Property" includes any present or future interest, whether legal or equitable, in real, personal (including chosen in action), or mixed property, tangible or intangi-ble, vested or contingent, wher-ever located and however held (in-cluding community property and property held in trust (including spendthrift and pension trusts)), but excludes-

(A) property held in trust by the United States for the benefit of an Indian tribe or individual Indian; and

(B) Indian lands subject to restrictions against alienation im-posed by the United States.

(13) "Security agreement" means an agreement that creates or provides for a lien.

(14) "State" means any of the several States, the District of Co-lumbia, the Commonwealth of Puer-to Rico, the Commonwealth of the Northern Marianas, or any territory or possession of the United States.

(15) "United States" means-

(A) a Federal corporation;

(B) an agency, department, commission, board, or other entity of the United States; or

(16) "United States marshal" means a United States marshal, a deputy marshal, or an official of the United States Marshals Service designated under section 564.

Rules of Construc-tion

Sec. 3003. (a) Terms.-For purposes of this chapter-

(1) the terms "includes" and "including" are not limiting;

(2) the term "or" is not exclu-sive; and

(3) the singular includes the plural.

(b) Effect on rights of the United States.-This chapter shall not be construed to curtail or limit the right of the Unit-ed States under any other Federal law or any State law-

(1) to collect taxes or to col-lect any other amount collectible in the same manner as a tax;

(2) to collect any fine, penalty, assessment, restitution, or forfeiture arising in a criminal case;

(3) to appoint or seek the appointment of a receiver; or

(4) to enforce a security agreement.

(1) title 11;

(2) admiralty law;

(3) section 3713 of title 31;

(4) section 303 of the Consumer Credit Protection Act (15 U.S.C. 1673);

(5) a statute of limitation applicable to a criminal proceeding;

(6) the common law or statutory rights to set off or recoupment;

(7) any Federal law authorizing, or any inherent authority of a court to provide, injunctive relief;

(8) the authority of a court-

(A) to impose a sanction under the Federal Rules of Civil Procedure;

(B) to appoint a receiver to effectuate its order; or

(9) any law authorizing the United States to obtain partition, or to recover possession, of property in which the United States holds title; or

(10) any provision of any other chapter of this title, except to the extent such provision is incon-sistent with this chapter.

(d) Preemption.-This chap-ter shall preempt State law to the extent such law is inconsistent with a provision of this chapter.

(e) Effect on rights of the United States under foreign and inter-nation-al law.-This chapter shall not be construed to curtail or limit the rights of the United States under foreign law, under a treaty or an international agreement, or otherwise under international law.

(f) Applicability of Federal Rules of Civil Procedure.-Except as provided otherwise in this chapter, the Federal Rules of Civil Procedure shall apply with respect to actions and proceedings under this chapter.

Service of Process; Enforcement; Notice

Sec. 3004. (a) Manner of service.-A complaint, notice, writ, or other process required to be served in an action or proceeding under this chapter shall be served in accordance with the Federal Rules of Civil Procedure unless otherwise provided in this chapter.

(b) Nationwide enforcement.-(1) Except as provided in paragraph (2)-

(A) any writ, order, judgment, or other process, including a summons and complaint, filed under this chapter may be served in any State; and

(B) such writ, order, or judg-ment may be enforced by the court issuing the writ, order, or process, regardless of where the person is served with the writ, or-der, or pro-cess.

(2) If the debtor so requests, within 20 days after receiving the notice described in section 3101(d) or 3202(b), the action or proceeding in which the writ, order, or judg-ment was issued shall be trans-ferred to the district court for the district in which the debtor resides.

(c) Notice and other process.-At such time as counsel for the United States considers appro-priate, but not later than the time a prejudgment or postjudgment reme-dy is put into effect under this chap-ter, counsel for the United States shall exercise reasonable diligence to serve on the debtor and any per-son who the United States believes, after exercis-ing due dili-gence, has possession, custody, or control of the property, a copy of the applica-tion for such remedy, the order granting such remedy, and the no-tice required by section 3101(d) or 3202(b).

Application of Chap-ter to Judg-ments

Sec. 3005. This chapter shall not apply with respect to a judgment on a debt if such judg-ment is en-tered more than 10 years before the effec-tive date of this chapter.

Affidavit Require-ments

Sec. 3006. Any affidavit re-quired of the United States by this chapter may be made on informa-tion and belief, if reliable and rea-sonably necessary, establishing with particu-larity, to the court's satisfac-tion, facts supporting the claim of the United States.

Perishable Personal Property

Sec. 3007. (a) Authority to sell.-If at any time during any action or proceed-ing under this chapter the court determines on its own initia-tive or upon motion of any party, that any seized or de-tained personal property is likely to perish, waste, or be destroyed, or otherwise sub-stantially depreciate in value during the pen-dency of the proceeding, the court shall order a commercially reason-able sale of such property.

(b) Deposit of sale pro-ceeds.--Within 5 days after such sale, the proceeds shall be deposited with the clerk of the court, accom-panied by a statement in writing and signed by the United States marshal, to be filed in the action or proceed-ing, stating the time and place of sale, the name of the purchaser, the amount received, and an itemized account of expenses.

(c) Presumption.-For pur-poses of liability on the part of the United States, there shall be a pre-sumption that the price paid at a sale under subsection (a) is the fair market value of the property or portion.

Proceedings Before United States Magistrates

Sec. 3008. A dis-trict court of the United States may assign its duties in pro-ceedings under this chapter to a United States magistrate to the extent not incon-sistent with the Constitution and laws of the United States.

United States Marshals' Authority to Designate Keeper

Sec. 3009. Whenever a United States marshal is authorized to seize property pursuant to this chapter, the United States marshal may designate another person or Federal agency to hold for safekeeping such property seized.

Co-owned Property

Sec. 3010. (a) Limitation.-The reme-dies available to the United States under this chapter may be enforced against property which is co-owned by a debtor and any other person only to the extent allowed by the law of the State where the prop-erty is located. This section shall not be construed to limit any right or inter-est of a debtor or co-owner in a retirement system for Federal mili-tary or civil-ian person-nel established by the United States or any agency thereof or in a quali-fied retirement arrange-ment.

(b) Definitions.-For pur-poses of subsection (a)-

(1) the term "retirement system for Federal military or civilian personnel" means a pension or annuity system for Federal military or civilian personnel of more than one agency, or for some or all of such personnel of a single agency, established by statute or by regulation pursuant to statutory authority; and

(2) the term "qualified retirement arrangement" means a plan qualified under section 401(a), 403(a), or 409 of the Internal Revenue Code of 1986 or a plan that is subject to the requirements of section 205 of the Employee Retirement Income Security Act of 1974.

Assessment of Surcharge on a Debt

Sec. 3011. (a) Surcharge authorized.-In an action or proceeding under subchapter B or C, and subject to subsection (b), the United States is entitled to recover a surcharge of 10 percent of the amount of the debt in connection with the recovery of the debt, to cover the cost of processing and handling the litigation and enforcement under this chapter of the claim for such debt.

(b) Limitation.-Subsection (a) shall not apply if-

(1) the United States receives an attorney's fee in connection with the enforcement of the claim; or

(2) the law pursuant to which the action on the claim is based pro-vides any other amount to cover such costs.

Joinder of Additional Defendant

Sec. 3012. The United States or the debtor may join as an additional defendant in an action or proceeding under this chapter any person rea-sonably believed to owe money (including money owed on account of a requirement to provide goods or services pursuant to a loan or loan guarantee extended under Federal law) to the debtor arising out of the transaction or occurrence giving rise to a debt.

Modification or Protective Order; Supervision of Enforcement

Sec. 3013. The court may at any time on its own initiative or the motion of any interested person, and after such notice as it may require, make an order denying, limiting, conditioning, regulating, extending, or modifying the use of any en-forcement procedure under this chapter.

Exempt Property

Sec. 3014. (a) Election to ex-empt proper-ty.-An individual debt-or may, in an action or proceeding under this chapter, elect to exempt property listed in either paragraph (1) or, in the alternative, paragraph (2). If such action or proceeding is against debtors who are husband and wife, one debtor may not elect to exempt property listed in para-graph (1) and the other debtor elect to exempt property listed in para-graph (2). If the debtors cannot agree on the alternative to be elect-ed, they shall be deemed to elect paragraph (1). Such property is either-

(1) property that is specified in section 522(d) of title 11, as amended from time to time; or

(2)(A) any property that is exempt under Federal law, other than paragraph (1), or State or local law that is applicable on the date of the filing of the application for a remedy under this chapter at the place in which the debtor's domicile has been located for the 180 days immediately preceding the date of the filing of such application, or for a longer portion of such 180-day period than in any other place; and

(B) any interest in property in which the debtor had, immediate-ly before the filing of such applica-tion, an interest as a tenant by the entirety or joint tenant, or an interest in a community estate, to the extent that such interest is exempt from process under applicable nonbank-ruptcy law.

(b) Effect on assertion and man-ner of determina-tion.-

(1) Statement.-A court may order the debtor to file a state-ment with regard to any claimed exemp-tion. A copy of such state-ment shall be served on counsel for the United States. Such statement shall be under oath and shall de-scribe each item of property for which exemp-tion is claimed, the value and the ba-sis for such valua-tion, and the nature of the debtor's ownership interest.

(2) Hearing.-The United States or the debtor, by application to the court in which an action or pro-ceeding under this chapter is pend-ing, may request a hearing on the applicability of any exemption claimed by the debtor. The court shall determine the extent (if any) to which the exemption applies. Un-less it is reasonably evident that the ex-emption applies, the debtor shall bear the burden of persuasion.

(3) Stay of disposi-tion.--Assertion of an exemption shall pre-vent the United States from selling or otherwise disposing of the prop-erty for which such exemption is claimed until the court determines whether the debtor has a substantial nonexempt interest in such property. The United States may not take possession of, dispose of, sell, or otherwise interfere with the debtor's normal use and enjoyment of an interest in property the United States knows or has reason to know is exempt.

(c) Debtors in joint cases.--Subject to the limitation in subsec-tion (a), this section shall apply separately with respect to each debt-or in a joint case.

Discovery as to Debtor's Finan-cial Condition

Sec. 3015. (a) In general.-Ex-cept as provid-ed in subsection (b), in an action or proceeding under sub-chap-ter B or C, the United States may have discov-ery regarding the finan-cial condition of the debtor in the manner in which discovery is autho-rized by the Federal Rules of Civil Procedure in an action on a claim for a debt.

(b) Limitation.-Subsection (a) shall not apply with respect to an action or proceeding under subchapter B unless there is a reasonable likelihood that the debt in-volved exceeds $50,000.

Subchapter B - Prejudgment Remedies

Prejudgment Rem-edies

Sec. 3101. (a) Application.-

(1) The United States may, in a pro-ceeding in con-junction with the complaint or at any time after the filing of a civil action on a claim for a debt, make application under oath to a court to issue any prejudg-ment remedy.

(2) Such application shall be filed with the court and shall set forth the factual and legal basis for each prejudgment remedy sought.

(3) Such application shall-

(A) state that the debtor against whom the prejudgment remedy is sought shall be afforded an opportunity for a hearing; and

(B) set forth with particu-larity that all statutory requirements under this chapter for the issuance of the prejudgment remedy sought have been satisfied.

(b) Grounds.-Subject to section 3102, 3103, 3104, or 3105, a pre-judgment remedy may be granted by any court if the United States shows reasonable cause to believe that-

(1) the debtor-

(A) is about to leave the jurisdiction of the United States with the effect of hindering, delay-ing, or defrauding the United States in its effort to recover a debt;

(B) has or is about to as-sign, dispose, remove, conceal, ill treat, waste, or destroy property with the effect of hindering, delay-ing, or defrauding the United States;

(C) has or is about to con-vert the debtor's property into mon-ey, securities, or evidence of debt in a manner prejudicial to the United States with the effect of hindering, delaying, or defrauding the United States; or

(D) has evaded service of pro-cess by concealing himself or has temporarily withdrawn from the jurisdiction of the United States with the effect of hindering, delay-ing, or defrauding the United States; or

(2) a prejudgment remedy is required to obtain jurisdiction within the United States and the prejudg-ment remedy sought will result in obtaining such jurisdiction.

(c) Affidavit.-(1) The ap-plica-tion under subsection (a) shall in-clude an affidavit establishing with particularity to the court's satisfac-tion facts supporting the probable validity of the claim for a debt and the right of the United States to recover what is demanded in the application.

(2) The affidavit shall state-

(A) specifically the amount of the debt claimed by the United States and any interest or costs attributable to such debt;

(B) one or more of the grounds specified in subsection (b); and

(3) No bond is required of the United States.

(d) Notice and hearing.-

(1) On filing an application by the United States as provided in this section, the counsel for the United States shall prepare, and the clerk shall issue, a notice for service on the debtor against whom the pre-judg-ment remedy is sought and on any other person whom the Unit-ed States reasonably believes, after exercising due diligence, has posses-sion, custody, or control of property affected by such remedy. Three copies of the notice shall be served on each such person. The form and content of such notice shall be ap-proved jointly by a ma-jority of the chief judges of the Federal districts in the State in which the court is located and shall be in substantial-ly the following form:

"Notice"

"You are hereby notified that this [property] is being taken by the United States Government ("the Government"), which says that [name of debtor] owes it a debt of $ [amount] for [reason for debt] and has filed a lawsuit to collect this debt. The Government says it must take this property at this time be-cause [recite the pertinent ground or grounds from section 3101(b)]. The Government wants to make sure [name of debtor] will pay if the court determines that this money is owed.

"In addition, you are hereby notified that there are exemptions under the law which may protect some of this property from being taken by the Government if [name of debtor] can show that the exemptions apply. Below is a summary of the major exemptions which apply in most situations in the State of [State where property is located]:

"[A statement summarizing in plain and understandable English the election available with respect to such State under section 3014 and the types of property that may be exempted under each of the alternatives specified in paragraphs (1) and (2) of section 3014(a), and a statement that different property may be so exempted with respect to the State in which the debtor resides.]

"If you are [name of debtor] and you disagree with the reason the Government gives for taking your property now, or if you think you do not owe the money to the Gov-ernment that it says you do, or if you think the property the Govern-ment is taking qualifies under one of the above exemptions, you have a right to ask the court to return your property to you.

"If you want a hearing, you must promptly notify the court. You must make your request in writing, and either mail it or deliver it in person to the clerk of the court at [address]. If you wish, you may use this notice to request the hearing by checking the box below and mailing this notice to the court clerk. You must also send a copy of your re-quest to the Government at [ad-dress], so the Government will know you want a hearing. The hear-ing will take place within 5 days after the clerk re-ceives your request, if you ask for it to take place that quickly, or as soon after that as possible.

"At the hearing you may explain to the judge why you think you do not owe the money to the Govern-ment, why you disagree with the reason the Government says it must take your property at this time, or why you believe the property the Government has taken is exempt or belongs to someone else. You may make any or all of these explana-tions as you see fit.

"If you think you live outside the Federal judicial district in which the court is located, you may re-quest, not later than 20 days after you receive this notice, that this proceed-ing to take your property be trans-ferred by the court to the Fed-eral judicial district in which you reside. You must make your request in writing, and either mail it or deliver it in person to the clerk of the court at [address]. You must also send a copy of your request to the Govern-ment at [address], so the Govern-ment will know you want the pro-ceeding to be transferred.

"Be sure to keep a copy of this notice for your own records. If you have any questions about your rights or about this procedure, you should contact a lawyer, an office of public legal assistance, or the clerk of the court. The clerk is not permitted to give legal advice, but can refer you to other sources of information."

(2) By requesting, at any time before judgment on the claim for a debt, the court to hold a hearing, the debtor may move to quash the order granting such remedy. The court shall hold a hearing on such motion as soon as practicable, or, if request-ed by the debtor, within 5 days after receiving the request for a hearing or as soon thereafter as possible. The issues at such hearing shall be limited to-

(A) the probable validity of the claim for the debt for which such remedy was granted and of any defense or claim of exemption as-serted by such person;

(B) compliance with any statutory requirement for the issu-ance of the prejudgment remedy granted;

(D) the inadequacy of alter-native remedies (if any) to protect the interests of the United States.

(e) Issuance of writ.-On the court's determination that the re-quirements of subsections (a), (b), and (c) have been met, the court shall issue all process sufficient to put into effect the prejudgment remedy sought.

Attach-ment

Sec. 3102. (a) Property subject to attach-ment.-

(1) Any property in the possession, custody, or control of the debtor and in which the debtor has a substantial nonexempt interest, except earnings, may be attached pursuant to a writ of at-tachment in an action or pro-ceeding against a debtor on a claim for a debt and may be held as secu-rity to satisfy such judgment, and interest and costs, as the United States may recover on such claim.

(2) The value of property attached shall not exceed the amount by which the sum of the amount of the debt claimed by the United States and the amount of interest and costs reasonably likely to be assessed against the debtor by the court exceeds the aggregate value of the nonexempt interest of the debtor in any-

(A) property securing the debt; and

(B) property garnished or in receivership, or income seques-tered, under this subchapter.

(b) Availability of at-tach-ment.-If the requirements of sec-tion 3101 are satisfied, a court shall issue a writ authorizing the United States to attach property in which the debtor has a substantial nonex-empt interest, as security for such judgment (and interest and costs) as the United States may recover on a claim for a debt-

(1) in an action on a contract, express or implied, against the debt-or for payment of money, only if the United States shows reasonable cause to believe that-

(A) the contract is not fully secured by real or personal property; or

(B) the value of the origi-nal security is substantially dimin-ished, without any act of the United States or the person to whom the security was given, below the amount of the debt;

(2) in an action against the debtor for damages in tort;

(3) if the debtor resides outside the juris-dic-tion of the United States; or

(4) in an action to recover a fine, penalty, or tax.

(1) Subject to sub-sections (a) and (b), a writ of attach-ment shall be issued by the court direct-ing the United States marshal of the district where property de-scribed in subsec-tion (a) is located to attach the property.

(2) Several writs of attach-ment may be issued at the same time, or in succession, and sent to different judicial districts until suffi-cient property is attached. (3) The writ of attachment shall contain-

(A) the date of the issuance of the writ;

(B) the identity of the court, the docket number of the action, and the identity of the cause of action;

(D) the amount to be se-cured by the attachment; and

(E) a reasonable description of the property to be attached.

(d) Levy of attach-ment.-

(1) The United States marshal re-ceiving the writ shall proceed without delay to levy upon the property specified for attachment if found within the district. The mar-shal may not sell property unless ordered by the court.

(2) In performing the levy, the United States marshal may enter any property owned, occupied, or con-trolled by the debtor, except that the marshal may not enter a resi-dence or other building unless the writ expressly authorizes the mar-shal to do so or upon specific order of the court.

(3) Levy on real property is made by entering the property and post-ing the writ and notice of levy in a conspicuous place upon the proper-ty.

(4) Levy on personal property is made by taking possession of it. Levy on personal property not easily taken into possession or which can-not be taken into possession without great inconvenience or expense may be made by affixing a copy of the writ and notice of levy on it or in a conspicuous place in the vicinity of it describing in the notice of levy the property by quan-tity and with suffi-cient detail to identify the prop-erty levied on.

(5) The United States marshal shall file a copy of the notice of levy in the same manner as provid-ed for judgments in section 3201(a)(1). The United States mar-shal shall serve a copy of the writ and notice of levy on-

(A) the debtor against whom the writ is issued; and

(B) the person who has possession of the property subject to the writ; in the same manner that a summons is served in a civil action and make the return thereof.

(e) Return of writ; du-ties of mar-shal; further return.-

(1) A United States marshal execut-ing a writ of attach-ment shall return the writ with the marshal's action endorsed there-on or attached thereto and signed by the marshal, to the court from which it was is-sued, within 5 days after the date of the levy.

(2) The return shall describe the property attached with sufficient certainty to identify it and shall state the location where it was attached, the date and time it was attached, and the disposition made of the property. If no property was at-tached, the return shall so state.

(3) If the property levied on is claimed, replevied under subsec-tion (j)(2), or sold under section 3007 after the return, the United States marshal shall immediately make a further return to the clerk of the court showing the disposition of the property.

(4) If personal property is re-plevied, the United States marshal shall deliver the replevin bond to the clerk of the court to be filed in the action.

(f) Levy of attachment as lien on property; satis-fac-tion of lien.-

(1) A levy on property under a writ of at-tach-ment under this section creates a lien in favor of the United States on the property or, in the case of per-ishable property sold under sec-tion 3007, on the proceeds of the sale.

(2) Such lien shall be ranked ahead of any other security inter-ests perfected after the later of the time of levy and the time a copy of the notice of levy is filed under subsec-tion (d)(5).

(3) Such lien shall arise from the time of levy and shall continue until a judgment in the action is obtained or denied, or the action is otherwise dismissed. The death of the debtor whose property is at-tached does not terminate the attach-ment lien. Upon issuance of a judg-ment in the action and registration under this chapter, the judgment lien so created relates back to the time of levy.

(g) Reduction or disso-lution of attachment.-

(1) If an excessive or unrea-son-able attachment is made, the debtor may submit a motion to the court for a reduction of the amount of the at-tachment or its dissolution. Notice of such motion shall be served on the United States.

(2) The court shall order a part of the property to be released, if after a hearing the court finds that the amount of the attachment is exces-sive or unreasonable or if the attach-ment is for an amount larger than the sum of the liquidated or ascertainable amount of the debt and the amount of interest and costs likely to be taxed.

(3) The court shall dissolve the attachment if the amount of the debt is unliquidated and unascertain-able by calculation.

(4) If any property claimed to be exempt is levied on, the debtor may, at any time after such levy, request that the court vacate such levy. If it appears to the court that the property so levied upon is ex-empt, the court shall order the levy vacated and the property returned to the debtor.

(h) Replevin of attached property by debtor; bond.-If attached property is not sold before judgment, the debtor may replevy such property or any part thereof by giving a bond approved by counsel for the United States or the court and payable to the United States in double the reasonable value of the property to be replevied or double the value of the claim, whichever is less.

(i) Preservation of personal property under attachment.-If personal property in custody of the United States marshal under a writ of attachment is not replevied, claimed, or sold, the court may make such order for its preservation or use as appears to be in the interest of the parties.

(j) Judgment and disposition of attached property.-

(1) Judgment for the United States.-On entry of judgment for the United States, the court shall order the proceeds of personal property sold pursuant to section 3007 to be applied to the satisfaction of the judgment, and shall order the sale of any remaining personal property and any real property levied on to the extent necessary to satisfy the judgment.

(2) Judgment for the United States when personal property replevied.-

With respect to personal property under attachment that is replevied, the judgment which may be entered shall be against the debt-or against whom the writ of attach-ment is issued and also against the sureties on the debtor's replevin bond for the value of the property.

(3) Restoration of pro-perty and exoneration of replevin bond.-If the attachment is vacated or if the judgment on the claim for the debt is for the person against whom the writ at-tachment is issued, the court shall order the property, or proceeds of perishable property sold under sec-tion 3007, restored to the debt-or and shall exonerate any replevin bond.

Receivership

Sec. 3103. (a) Appointment of a re-ceiv-er.-If the requirements of section 3101 are satisfied, a court may appoint a receiver for property in which the debtor has a substantial nonexempt interest if the United States shows reasonable cause to believe that there is a substantial danger that the property will be removed from the jurisdiction of the court, lost, concealed, materially injured or damaged, or mismanaged.

(b) Powers of receiv-er.-

(1) The appointing court may autho-rize a receiver-

(A) to take possession of real and personal property and sue for, col-lect, and sell obligations upon such conditions and for such pur-poses as the court shall direct; and

(B) to administer, collect, improve, lease, repair or sell pursu-ant to section 3007 such real and personal property as the court shall direct.

A receiver appointed to manage residential or commercial property shall have demonstrable expertise in the management of these types of property.

(2) Unless expressly authorized by order of the court, a receiver shall have no power to employ attorneys, accountants, appraisers, auctioneers, or other professional persons.

(c) Duration of re-ceivership.-A receivership shall not continue past the entry of judgment, or the con-clusion of an appeal of such judg-ment, unless the court orders it continued under section 3203(e) or unless the court otherwise directs its continuation.

(d) Accounts; require-ment to report.-A receiver shall keep writ-ten accounts itemiz-ing receipts and expenditures, de-scribing the property and naming the depository of re-ceivership funds. The receiver's accounts shall be open to inspection by any person having an apparent interest in the property. The receiv-er shall file reports at regular inter-vals as direct-ed by the court and shall serve the debtor and the Unit-ed States with a copy thereof.

(e) Modification of pow-ers; re-moval.-On motion of the receiver or on its own initiative, the court which appointed the re-ceiver may remove the receiver or modify the receiver's powers at any time.

(f) Priority.-If more than one court appoints a receiver for particu-lar property, the receiver first quali-fying under law shall be enti-tled to take possession, control, or custody of the property.

(g) Compensation of re-ceiv-ers.-

(1) A receiver is enti-tled to such commissions, not ex-ceeding 5 per-cent of the sums re-ceived and dis--bursed by him, as the court al-lows unless the court otherwise directs.

(2) If, at the termination of a receivership, there are no funds in the hands of a receiver, the court may fix the compensation of the receiver in accordance with the services rendered and may direct the party who moved for the appointment of the receiver to pay such compensation in addition to the necessary expenditures incurred by the receiver which remain unpaid.

(3) At the termination of a receivership, the receiver shall file a final accounting of the receipts and disbursements and apply for compensation setting forth the amount sought and the services rendered by the receiver.

Garnishment

Sec. 3104. (a) In general.-If the re-quire-ments of section 3101 are satisfied, a court may issue a writ of garnish-ment against property (ex-cluding earnings) in which the debt-or has a substantial nonexempt interest and which is in the posses-sion, custody, or control of a person other than the debtor in order to satisfy a claim for a debt. Co-owned property shall be subject to garnish-ment to the same extent as co-own-ed property is subject to garnish-ment under the law of the State in which such prop-erty is located. A court may issue simulta-neous sepa-rate writs of gar-nishment to several garnishees. A writ of garnishment issued under this sub-section shall be continuing and shall terminate only as provided in sec-tion 3205(c)(10).

(b) Writ.-

(1) Subsections (b)(2) and (c) of section 3205 shall apply with re-spect to garnishment under this section, except that for purposes of this section- (A) earnings of the debtor shall not be subject to garnishment; and

(B) a reference in such subsections to a judgment debtor shall be deemed to be a reference to a debtor.

(2) The United States shall include in its application for a writ of garnishment-

(A) the amount of the claim asserted by the United States for a debt; and

(B) the date the writ is issued.

(c) Limitation.-The value of property garnished shall not exceed the amount by which the sum of the amount of the debt claimed by the United States and the amount of interest and costs reasonably likely to be assessed against the debtor by the court ex-ceeds the aggregate value of the nonex-empt interest of the debtor in any-

(1) property securing the debt; and

(2) property attached or in receivership, or income sequestered, under this subchapter. (28 U.S.C. 3104)

Sequestration

Sec. 3105. (a) Property subject to sequestration.-

(1) Any income from proper-ty in which the debtor has a sub-stantial nonexempt interest may be seques-tered pursuant to a writ of seques-tration in an action or pro-ceeding against a debt-or on a claim for a debt and may be held as secu-rity to satisfy such judgment, and interest and costs, as the United States may recover on such claim.

(2) The amount of income sequestered shall not exceed the amount by which the sum of the amount of the debt claimed by the United States and the amount of interest and costs reasonably likely to be assessed against the debtor by the court exceeds the aggregate value of the nonexempt interest of the debtor in any-

(A) property securing the debt; and

(B) property attached, gar-nished, or in receivership under this subchap-ter.

(b) Availability of se-qu-estra-tion.-If the require-ments of section 3101 are satisfied, a court shall issue a writ authorizing the United States to sequester in-come from property in which the debtor has a substantial nonexempt interest, as security for such judg-ment (and in-ter-est and costs) as the United States may recover on a claim for a debt-

(1) in an action on a contract, express or implied, against the debt-or for payment of money, only if the United States shows reasonable cause to believe that-

(A) the contract is not fully secured by real or personal property; or

(B) the value of the original security is substantially diminished, without any act of the United States or the person to whom the security was given, below the amount of the debt;

(2) in an action against the debtor for damages in tort;

(3) if the debtor resides out-side the jurisdiction of the United States; or

(4) in an action to recover a fine, penalty, or tax.

(c) Issuance of writ; con-tents.-- (1) Subject to sub-sections (a) and (b), a writ of se-questration shall be issued by the court direct-ing the United States marshal of the district where income described in subsec-tion (a) is locat-ed to sequester the income.

(2) Several writs of sequestra-tion may be issued at the same time, or in succession, and sent to differ-ent judicial districts until sufficient income is sequestered.

(3) The writ of sequestration shall contain-

(A) the date of the issuance of the writ;

(B) the identity of the court, the docket number of the action, and the identity of the cause of action;

(D) the amount to be se-cured by the sequestration; and

(E) a reasonable description of the income to be sequestered.

(d) Execution of writ.-

(1) The United States marshal re-ceiving the writ shall proceed with-out delay to execute the writ.

(2) The United States marshal shall file a copy of the notice of sequestration in the same manner as provided for judgments in section 3201(a)(1). The United States mar-shal shall serve a copy of the writ and notice of sequestration on-

(A) the debtor against whom the writ is issued; and

(B) the person who has possession of the income subject to the writ; in the same manner that a summons is served in a civil action and make the return thereof.

(e) Deposit of sequest-ered in-come.-A person who has posses-sion of the income subject to a writ of sequestration shall de-posit such income with the clerk of the court, accompanied by a state-ment in writing stating the person's name, the name of the debtor, the amount of such income, the property from which such income is pro-duced, and the period during which such in-come is produced.

(f) Return of writ; du-ties of mar-shal; further return.-

(1) A United States marshal execut-ing a writ of seques-tration shall return the writ with the mars-hal's action endorsed thereon or attached thereto and signed by the marshal, to the court from which it was is-sued, within 5 days alter the date of the execution.

(2) The return shall describe the income sequestered with suffi-cient certainty to identify it and shall state the location where it was sequestered, and the date and time it was sequestered. If no income was sequestered, the return shall so state.

(3) If sequestered income is claimed after the return, the United States marshal shall immediately make a further return to the clerk of the court showing the disposition of the income.

(g) Reduction or disso-lution of sequestra-tion.-

(1) If an excessive or un-reason-able sequestration is made, the debt-or may submit a motion to the court for a reduction of the amount of the sequestration or its dissolu-tion. Notice of such motion shall be served on the Unit-ed States.

(2) The court shall order a part of the income to be released, if after a hearing the court finds that the amount of the sequestration is ex-cessive or unreasonable or if the sequestration is for an amount larger than the sum of the liquidated or ascertainable amount of the debt and the amount of interest and costs likely to be taxed.

(3) The court shall dissolve the sequestration if the amount of the debt is unliquidated and unascer-tainable by calculation.

(h) Preservation of in-come under sequester.-If personal property in custody of the United States marshal under a writ of sequestra-tion is not claimed, the court may make such order for its preservation or use as appears to be in the interest of the parties.

(i) Judgment and disposi-tion of sequestered in-come.-

(1) Judgment for the United States.-On entry of judgment for the United States, the court shall order the sequestered income to be applied to the satisfac-tion of the judgment.

(2) Restoration of in-come.-If the sequestration is vacated or if the judgment on the claim for the debt is for the person against whom the writ of sequestra-tion is issued, the court shall order the income restored to the debtor.

Subchapter C - Postjudgment Remedies

Judgment Liens

Sec. 3201. (a) Creation.-A judgment in a civil action shall create a lien on all real property of a judgment debtor on filing a certi-fied copy of the abstract of the judgment in the manner in which a notice of tax lien would be filed under paragraphs (1) and (2) ofsection 6323(f) of the Internal Reve-nue Code of 1986. A lien created under this paragraph is for the amount necessary to satisfy the judgment, including costs and inter-est.

(b) Priority of lien.-A lien created under subsection (a) shall have priority over any other lien or encumbrance which is perfected later in time.

(c) Duration of lien; renewal.-(1) Except as provided in paragraph (2), a lien created under subsection (a) is effective, unless satisfied, for a period of 20 years.

(2) Such lien may be renewed for one additional period of 20 years upon filing a notice of renewal in the same manner as the judgment is filed and shall relate back to the date the judgment is filed if-

(A) the notice of renewal is filed before the expiration of the 20-year period to prevent the expiration of the lien; and (B) the court approves the renewal of such lien under this paragraph.

(d) Release of judgment lien.-A judgment lien shall be released on the filing of a satisfaction of judgment or release of lien in the same manner as the judgment is filed to obtain the lien.

(e) Effect of lien on eligibility for federal grants, loans or programs.-A debtor who has a judgment lien against the debtor's property for a debt to the United States shall not be eligible to re-ceive any grant or loan which is made, in-sured, guar-anteed, or fi-nanced di-rectly or indi-rectly by the United States or to receive funds directly from the Federal Govern-ment in any pro-gram, except funds to which the debtor is entitled as beneficiary, until the judgment is paid in full or otherwise satisfied. The agency of the United States that is responsible for such grants and loans may promulgate regulations to allow for waiver of this restric-tion on eligibil-ity for such grants, loans, and funds.

(f) Sale of property sub-ject to judgment lien.-

(1) On proper ap-plication to a court, the court may order the Unit-ed States to sell, in accordance with sections 2001 and 2002, any real property subject to a judgment lien in effect under this section.

(2) This subsection shall not preclude the United States from using an execution sale pursuant to section 3203(g) to sell real property subject to a judgment lien.

Enforcement of Judg-ments

Sec. 3202. (a) Enforcement reme-dies.-A judgment may be en-forced by any of the remedies set forth in this subchapter. A court may issue other writs pursuant to section 1651 of title 28, United States Code, as necessary to support such remedies, subject to rule 81(b) of the Federal Rules of Civil Proce-dure.

(b) Notice.-On the com-mencement by the United States of an action or proceeding under this subchapter to obtain a remedy, the counsel for the United States shall prepare, and clerk of the court shall issue, a notice in substantially the following form:

"Notice"

"You are hereby notified that this [property] is being taken by the United States Government, which has a court judgment in [case docket number and jurisdiction of court] of $[amount] for [reason of debt].

"In addition, you are hereby noti-fied that there are exemptions under the law which may protect some of this property from being taken by the United States Govern-ment if [name of judgment debtor] can show that the exemptions apply. Below is a summary of the major exemptions which apply in most situations in the State of [State where property is located]:

"[A statement summarizing in plain and understandable English the election available with respect to such State under section 3014 and the types of property that may be exempted under each of the alterna-tives specified in paragraphs (1) and (2) of section 3014(a) and a state-ment that different property may be so exempted with respect to the State in which the debtor resides.]

"If you are [name of judgment debtor], you have a right to ask the court to return your property to you if you think the property the Gov-ernment is taking qualifies under one of the above exemptions [For a default judgment:] or if you think you do not owe the money to the United States Government that it says you do.

"If you want a hearing, you must notify the court within 20 days after you receive this notice. You must make your request in writing, and either mail it or deliver it in person to the clerk of the court at [address]. If you wish, you may use this notice to request the hearing by checking the box below and mailing this notice to the court clerk. You must also send a copy of your request to the Government at [address], so the Government will know you want a hearing. The hearing will take place within 5 days after the clerk re-ceives your request, if you ask for it to take place that quickly, or as soon after that as possible.

"At the hearing you may explain to the judge why you believe the property the Government has taken is exempt [For a default judgment:] or why you think you do not owe the money to the Government. [For a writ of execution:] If you do not request a hearing within 20 days of receiving this notice, your [property] may be sold at public auction and the payment used toward the money you owe the Government.

(c) Service.-A copy of the notice and a copy of the application for granting a remedy under this subchapter shall be served by coun-sel for the United States on the judgment debtor against whom such remedy is sought and on each per-son whom the United States, after diligent inquiry, has reasonable cause to believe has an interest in property to which the remedy is directed.

(d) Hearing.-By requesting, within 20 days after receiving the notice described in section 3202(b), the court to hold a hearing, the judgment debtor may move to quash the order granting such remedy. The court that issued such order shall hold a hearing on such motion as soon as practicable, or, if so re-quested by the judgment debtor, within 5 days after receiving the request or as soon thereafter as possible. The issues at such hearing shall be limited-

(1) to the probable validity of any claim of exemption by the judgment debtor;

(2) to compliance with any statutory requirement for the issuance of the postjudgment remedy granted; and

(3) if the judgment is by default and only to the extent that the Constitution or another law of the United States provides a right to a hearing on the issue, to-

(A) the probable validity of the claim for the debt which is merged in the judgment; and

(B) the existence of good cause for setting aside such judg-ment.

This subparagraph shall not be construed to afford the judgment debtor the right to more than one such hearing except to the extent that the Constitu-tion or another law of the United States provides a right to more than one such hearing.

(e) Sale of pro-perty.-The prop-erty of a judg-ment debtor which is subject to sale to satisfy the judg-ment may be sold by judicial sale, pursuant to sections 2001, 2002, and 2004 or by execution sale pursuant to section 3203(g). If a hearing is requested pursuant to subsection (d), property with respect to which the request relates shall not be sold before such hearing.

Execution

Sec. 3203. (a) Property subject to execu-tion.-All property in which the judgment debtor has a substan-tial nonexempt interest shall be subject to levy pursuant to a writ of execu-tion. The debtor's earnings shall not be subject to execution while in the possession, custody, or control of the debtor's employer. Co-owned property shall be subject to execu-tion to the extent such proper-ty is subject to execution under the law of the State in which it is locat-ed.

(b) Creation of execu-tion lien.-A lien shall be creat-ed in favor of the United States on all property levied on under a writ of execution and shall date from the

time of the levy. Such lien shall have priority over all subsequent liens and shall be for the aggregate amount of the judgment, costs, and interest. The execution lien on any real property as to which the United States has a judgment lien shall relate back to the judgment lien date.

(1) Issuance.-On written application of counsel for the United States, the court may issue a writ of execution. Multiple writs may issue simulta-neously, and successive writs may issue before the return date of a writ previously issued.

(2) Form of writ.-

(A) General con-tents.-A writ of execution shall specify the date that the judgment is entered, the court in which it is entered, the amount of the judgment if for mon-ey, the amount of the costs, the amount of interest due, the sum due as of the date the writ is issued, the rate of postjudgment interest, the name of the judgment debtor, and the judgment debtor's last known address.

(B) Additional con-tents.-

(i) Except as provided in clauses (ii) and (iii), the writ shall direct the United States marshal to satisfy the judgment by levying on and selling proper-ty in which the judgment debtor has a sub-stantial nonexempt interest, but not to ex-ceed proper-ty reasonably equivalent in value to the aggre-gate amount of the judgment, costs, and interest.

(ii) A writ of execution issued on a judgment for the deliv-ery to the United States of the pos-session of personal prop-erty, or for the delivery of the possession of real property, shall particularly describe the property, and shall require the marshal to deliver the possession of the property to the United States.

(iii) A writ of execution on a judgment for the recovery of personal property or its value shall direct the marshal, in case a delivery of the specific property cannot be had, to levy and collect such value out of any property in which the judgment debtor has a substantial nonexempt interest.

(d) Levy of execution.-

(1) In general.-Levy on prop-erty pursuant to a writ of exe-cution issued under this section shall be made in the same manner as levy on property is made pursuant to a writ of attachment issued under section 3102(d).

(2) Death of judgment debt-or.-The death of the judg-ment debtor after a writ of execu-tion is issued stays the execution proceed-ings, but any lien acquired by levy of the writ shall be recog-nized and enforced by the court for the district in which the estate of the deceased is located. The execution lien may be enforced-

(A) against the executor, administrator, or personal represen-tative of the estate of the deceased; or

(B) if there be none, against the deceased's property coming to the heirs or devisees or at their option against cash in their posses-sion, but only to the extent of the value of the property coming to them.

(3) Records of United States marshal.-

(A) A United States marshal receiv-ing a writ of execu-tion shall endorse thereon the exact hour and date of receipt.

(B) The United States mar-shal shall make a written record of every levy, specify the property on which levy is made, the date on which levy is made, and the marshal's costs, expenses, and fees.

(C) The United States mar-shal shall make a written return to the court on each writ of execu-tion stating concisely what is done pur-suant to the writ and shall deliv-er a copy to counsel for the United States who requests the writ. The writ shall be returned not more than-

(i) 90 days after the date of issuance if levy is not made; or

(ii) 10 days after the date of sale of property on which levy is made.

(e) Appointment of re-ceiver.- Pending the levy of execu-tion, the court may appoint a receiv-er to manage property de-scribed in such writ if there is a substantial danger that the property will be removed from the jurisdic-tion of the court, lost, materially injured or damaged, or mismanaged.

(f) Replevy; redemp-tion.-

(1) Before execution sale.- (A) Before execution sale, the Unit-ed States marshal may re-turn prop-erty to the judgment debtor any personal property taken in exe-cu-tion, on-

(i) satisfaction of the judg-ment, interest, and costs, and any costs incurred in connection with scheduling the sale; or

(ii) receipt from the judg-ment debtor of a bond-

(I) payable to the United States, with 2 or more good and sufficient sureties to be approved by the marshal, conditioned on the delivery of the property to the mar-shal at the time and place named in the bond to be sold under subsection (g); or

(II) for the payment to the marshal of a fair value thereof which shall be stated in the bond.

(B) A judgment debtor who sells or disposes of property replev-ied under subparagraph (A) shall pay the United States marshal the stipulated value of such proper-ty.

(C) If the judgment debtor fails to deliver such property to the United States marshal pursuant to the terms of the delivery described in subpara-graph (A)(ii)(I) and fails to pay the United States marshal the stipulated value of such property, the United States marshal shall endorse the bond "forfeited" and return it to the court from which the writ of execution issued. If the judgment is not fully satisfied, the court shall issue a writ of execution against the judgment debtor and the sureties on the bond for the amount due, not exceeding the stipulated value of the property, on which execution no delivery bond shall be taken, which instruction shall be endorsed on the writ.

(2) After execution sale.-The judgment debtor shall not be entitled to redeem the proper-ty after the execution sale.

(g) Execution sale.-

(1) General proce-dures.-An execution sale under this section shall be conducted in a commercial-ly reasonable manner-

(A) Sale of real pro-perty.-

(i) In general.-

(I) Except as provided in clause (ii), real property, or any interest therein, shall be sold, after the expiration of the 90-day period beginning on the date of levy under subsec-tion (d), for cash at public auc-tion at the courthouse of the county, parish, or city in which the greater part of the property is locat-ed or on the premis-es or some par-cel there-of.

(II) The court may order the sale of any real property after the expiration of the 30-day period beginning on the date of levy under subsection (d) if the court deter-mines that such property is likely to per-ish, waste, be destroyed, or oth-er-wise substantially depreciate in value during the 90-day period beginning on the date of levy.

(III) The time and place of sale of real property, or any interest therein, under execu-tion shall be advertised by the United States marshal, by publication of notice, once a week for at least 3 weeks prior to the sale, in at least one newspaper of general circula-tion in the county or parish where the prop-erty is located. The first publication shall appear not less than 25 days preceding the day of sale. The notice shall contain a state-ment of the authority by which the sale is to be made, the time of levy, the time and place of sale, and a brief de-scription of the property to be sold, sufficient to identify the property (such as a street ad-dress for urban property and the survey identifica-tion and location for rural property), but it shall not be necessary for the notice to contain field notes. Such property shall be open for inspection and appraisal, subject to the judgment debtor's reasonable ob-jections, for a reasonable peri-od before the day of sale.

(IV) The United States marshal shall serve written notice of public sale by per-sonal delivery, or certified or registered mail, to each person whom the marshal has rea-son-able cause to believe, after a title search is conducted by the United States, has an interest in property under execution, including lienholders, co-own-ers, and tenants, at least 25 days before the day of sale, to the last known address of each such person.

(ii) Sale of city lots.-If the real property consists of several lots, tracts, or parcels in a city or town, each lot, tract, or parcel shall be of-fered for sale separate-ly, unless not susceptible to sepa-rate sale because of the character of im-provements.

(iii) Sale of rural proper-ty.-If the real proper-ty is not locat-ed in a city or town, the judgment debtor may-

(I) divide the property into lots of not less than 50 acres or in such greater or lesser amounts as ordered by the court

(II) furnish a survey of such prepared by a registered sur-veyor; and

(III) designate the order in which those lots shall be sold. When a sufficient number of lots are sold to satisfy the amount of the execution and costs of sale, the marshal shall stop the sale.

(B) Sale of personal proper-ty.-

(i) Personal property levied on shall be offered for sale on the premises where it is located at the time of levy, at the court-house of the coun-ty, parish or city wherein it is locat-ed, or at another location if ordered by the court. Personal prop-erty suscep-ti-ble of being exhib-ited shall not be sold unless it is present and subject to the view of those at-tend-ing the sale unless-

(I) the property consists of shares of stock in corporations;

(II) by reason of the nature of the property, it is impracti-cal to exhibit it; or

(III) the debtor's interest in the property does not include the right to the exclusive pos-session.

(ii)(I) Except as provided in subclause (II), personal proper-ty, or any interest therein, shall be sold after the expiration of the 30-day period beginning on the date of levy under subsection (d).

(II) The court may order the sale of any personal property before the expiration of such 30-day period if the court determines that such prop-erty is likely to perish, waste, be destroyed, or otherwise sub-stan-tially depreciate in value during such 30-day period.

(iii) Notice of the time and place of the sale of personal proper-ty shall be given by the United States mar-shal by posting notice thereof for not less than 10 days successively immediately before the day of sale at the courthouse of any county, parish, or city, and at the place where the sale is to be made.

(iv) The United States marshal shall serve written notice of public sale by personal delivery, or registered or certified mail at their last known addresses, on the judgment debtor and other persons who the marshal has reasonable cause to believe, after diligent inquiry, have a substantial interest in the property.

(2) Postponement of sale.-The United States marshal may postpone an execution sale from time to time by continuing the re-quired posting or publication of notice until the date to which the sale is postponed, and appending, at the foot of each such notice of a current copy of the following:

"The above sale is postponed until _____________ the day of 19___, at o'clock _____ ___.M., __________________, Unit-ed States Marshal for the District of ___________________________, __________________ by Depu-ty, dated ______________________.

(3) Sale procedures.-

(A) Bidding require-ments.-A bidder at an execution sale of property, may be required by the United States marshal to make a cash deposit of as much as 20 per-cent of the sale price proposed before the bid is accepted.

(B) Resale of pro-per-ty.-If the terms of the sale are not com-plied with by the suc-cessful bidder, the United States marshal shall proceed to sell the property again on the same day if there is sufficient time. If there is insuffi-cient time, the marshal shall sched-ule and no-tice a subsequent sale of the proper-ty as provided in para-graphs (1) and (2).

(4) Rights and liabili-ties of purchasers.-

(A) Transfer of ti-tle after sale.-

(i) If property is sold under this subsection and the successful bidder complies with the terms of the sale, the United States mar-shal shall execute and deliver all docu-ments necessary to transfer to the successful bidder, without warranty, all the rights, titles, interests, and claims of the judg-ment debtor in the property.

(ii) If the successful bidder dies before execution and deliv-ery of the documents needed to transfer ownership, the United States mar-shal shall execute and deliver them to the successful bidder's estate. Such delivery to the estate shall have the same effect as if accom-plished during the lifetime of the purchaser.

(B) Purchaser con-sidered innocent purchas-er without no-tice.-The purchaser of property sold under execution shall be deemed to be an innocent purchaser without notice if the purchaser would have been considered an innocent purchaser without notice had the sale been made voluntarily and in person by the judgment debt-or.

(C) Liability of suc-cessful bidder who fails to comply.-A successful bidder at an execution sale who fails to comply with the terms of the sale shall forfeit to the United States the cash deposit or, at the election of the United States, shall be liable to the United States, on a subsequent sale of the property, for all net losses incurred by the United States as a result of such failure.

(h) Disposition of pro-ceeds; fur-ther levy.-

(1) Distribution of sale pro-ceeds.-

(A) The Unit-ed States mar-shal shall first deliver to the judg-ment debtor such amounts to which the judgment debtor is entitled from the sale of partially exempt proper-ty.

(B) The United States mar-shal shall next deduct from the proceeds of an execution sale of property an amount equal to the reasonable expenses incurred in making the levy of execution and in keeping and maintaining the proper-ty.

(C) Except as provided in subparagraph (D), the United States marshal shall deliver the balance of the proceeds to the counsel for the United States as soon as practicable.

(D) If more proceeds are received from the execution sale than is necessary to satisfy the exe-cutions held by the United States marshal, the marshal shall pay the surplus to the judgment debtor.

(2) Further levy if exe-cution not satis-fied.-If the proceeds of the execution sale of the property levied on are insuffi-cient to satisfy the execution, the United States marshal shall proceed on the same writ of execution to levy other property of the judgment debtor.

Installment Pay-ment Order

Sec. 3204. (a) Authority to issue or-der.-Subject to subsection (c), if it is shown that the judgment debt-or-

(1) is receiving or will receive substantial nonexempt disposable earnings from self employment that are not subject to garnishment; or

(2) is diverting or concealing substantial earnings from any source, or property received in lieu of earnings;

then upon motion of the United States and notice to the judgment debtor, the court may, if appropriate, order that the judgment debtor make specified installment payments to the United States. No-tice of the motion shall be served on the judg-ment debtor in the same manner as a summons or by regis-tered or certified mail, return receipt requested. In fixing the amount of the payments, the court shall take into consideration after a hearing, the income, resources, and reasonable requirements of the judgment debtor and the judgment debtor's dependents, any other payments to be made in satisfaction of judgments against the judgment debtor, and the amount due on the judgment in favor of the United States.

(b) Modification of order.-On motion of the United States or the judgment debtor, and upon a showing that the judgment debtor's financial circumstances have changed or that assets not previously disclosed by the judgment debtor have been discovered, the court may modify the amount of payments, alter their frequency, or require full payment.

(c) Limitation.- (1) An order may not be is-sued under sub-section (a), and if so is-sued shall have no force or effect, against a judgment debtor with respect to whom there is in effect a writ of garnishment of earnings issued under this chapter and based on the same debt.

(2) An order may not be issued under subsection (a) with respect to any earnings of the debtor except nonexempt disposable earnings.

Garnishment

Sec. 3205. (a) In general.-A court may issue a writ of garnish-ment against property (including nonex-empt disposable earnings) in which the debtor has a substantial nonex-empt interest and which is in the posses-sion, custody, or control of a person other than the debtor, in order to satisfy the judgment against the debtor. Co-owned property shall be subject to garnishment to the same extent as co-owned property is subject to garnish-ment under the law of the State in which such prop-erty is located. A court may issue simulta-neous separate writs of gar-nishment to several garnishees. A writ of garnishment issued under this subsection shall be continuing and shall terminate only as provided in subsection (c)(10).

(b) Writ.-

(1) General requirements.--The United States shall include in its application for a writ of garnish-ment-

(A) the judgment debtor's name, social security number (if known), and last known address;

(B) the nature and amount of the debt owed and the facts that not less than 30 days has elapsed since demand on the debtor for payment of the debt was made and the judgment debtor has not paid the amount due; and

(C) that the garnishee is believed to have possession of prop-erty (including nonexempt dispos-able earnings) in which the debtor has a substantial nonexempt interest.

(2) Proper garnishee for partic-ular proper-ty.-

(A) If the property consists of a right to or share in the stock of an association or corporation, or interests or profits therein, for which a certificate of stock or other nego-tiable instrument is not outstanding, the corporation, or the president or treasurer of the association shall be the garnishee.

(B) If the property consists of an interest in a partnership interest, any partner other than the debtor shall be the garnishee on behalf of the partnership.

(C) If the property or a debt is evidenced by a negotiable instrument for the payment of money, a negotiable document of title or a certificate of stock of an associa-tion or corporation, the instrument, docu-ment, or certificate shall be treated as property capable of deliv-ery and the person holding it shall be the garnishee, except that-

(i) subject to clause (ii), in the case of a security which is trans-fer-able in the manner set forth in State law, the entity that carries on its books an account in the name of the debtor in which is reflected such security shall be the garnishee; and

(ii) notwithstanding clause (i), the pledgee shall be the gar-nish-ee if such security is pledged.

(1) Court determina-tion.-If the court determines that the re-quirements of this section are satis-fied, the court shall issue appro-pri-ate writ of garnishment.

(2) Form of writ.-The writ shall state-

(A) The nature and amount of the debt, and any cost and inter-est owed with respect to the debt.

(B) The name and address of the garnishee.

(D) The last known address of the judgment debtor.

(E) That the garnishee shall answer the writ within 10 days of service of the writ.

(F) That the garnishee shall withhold and retain any property in which the debtor has a substantial nonexempt interest and for which the garnishee is or may become indebted to the judgment debtor pending further order of the court.

(3) Service of writ.-The United States shall serve the gar-nishee and the judg-ment debtor with a copy of the writ of garnishment and shall certify to the court that this service was made. The writ shall be accompa-nied by-

(A) an instruction explain-ing the requirement that the garnish-ee submit a written answer to the writ; and

(B) instructions to the judg-ment debt-or for objecting to the answer of the garnishee and for obtaining a hear-ing on the objec-tions.

(4) Answer of the gar-nish-ee.-In its written answer to the writ of garnishment, the garnish-ee shall state under oath-

(A) whether the garnishee has custody, control or possession of such property;

(B) a description of such property and the value of such inter-est;

(C) a description of any previous garnishments to which such property is subject and the extent to which any remaining prop-erty is not exempt; and

(D) the amount of the debt the garnishee anticipates owing to the judgment debtor in the future and whether the period for payment will be weekly or another specified period.

The garnishee shall file the origi-nal answer with the court issu-ing the writ and serve a copy on the debtor and counsel for the United States.

(5) Objections to an-swer.-Within 20 days after re-ceipt of the answer, the judgment debtor or the United States may file a written objection to the answer and request a hearing. The party object-ing shall state the grounds for the objection and bear the burden of proving such grounds. A copy of the objection and request for a hear-ing shall be served on the garnishee and all other parties. The court shall hold a hearing within 10 days after the date the request is received by the court, or as soon thereafter as is practicable, and give notice of the hearing date to all the parties.

(6) Garnishee's fail-ure to an-swer or pay.-If a garnishee fails to answer the writ of garnishment or to withhold property in accor-dance with the writ, the United States may petition the court for an order re-quiring the garnishee to appear before the court to answer the writ and to so withhold property before the appearance date. If the garnish-ee fails to appear, or appears and fails to show good cause why the gar-nishee failed to comply with the writ, the court shall enter judg-ment against the garnishee for the value of the judgment debtor's nonexempt interest in such property (including nonexempt disposable earnings). The court may award a reasonable attorney's fee to the United States and against the gar-nishee if the writ is not answered within the time specified therein and a petition requiring the garnishee to appear is filed as provided in this section.

(7) Disposition or-der.-After the garnishee files an answer and if no hearing is request-ed within the required time period, the court shall promptly enter an order directing the garnishee as to the disposition of the judgment debtor's nonexempt interest in such property. If a hear-ing is timely requested, the order shall be entered within 5 days after the hearing, or as soon thereafter as is practicable.

(8) Priorities.-Judicial orders and garnishments for the support of a person shall have prior-ity over a writ of garnishment is-sued under this section. As to any other writ of garnishment or levy, a garnishment issued under this sec-tion shall have priority over writs which are issued later in time.

(9) Accounting.-

(A) While a writ of garnish-ment is in effect under this section, the United States shall give an an-nual account-ing on the garnishment to the judg-ment debtor and the garnishee.

(B) Within 10 days after the garnishment terminates, the United States shall give a cumula-tive writ-ten accounting to the judg-ment debtor and garnishee of all property it receives under a writ of garnish-ment. Within 10 days after such accounting is received, the judgment debtor or garnishee may file a writ-ten objection to the ac-counting and a request for hearing. The party objecting shall state grounds for the objection. The court shall hold a hearing on the objection within 10 days after the court re-ceives the request for a hearing, or as soon thereafter as is practicable.

(10) Termination of garnish-ment.-A garnishment under this chapter is terminated only by-

(A) a court order quashing the writ of garnishment;

(B) exhaustion of property in the possession, custody, or con-trol of the garnishee in which the debtor has a substantial nonexempt interest (including nonexempt dis-posable earnings), unless the gar-nishee reinstates or reemploys the judgment debtor within 90 days after the judgment debtor's dismiss-al or resignation; or

Discharge

Sec. 3206. A person who pursu-ant to an execution or order issued under this chapter by a court pays or delivers to the United States, a United States marshal, or a receiver, money or other personal property in which a judgment debtor has or will have an interest, or so pays a debt such person owes the judgment debtor, is discharged from such debt to the judgment debtor to the extent of the payment or delivery.

Subchapter D - Fraudulent Transfers Involving Debts

Definitions

Sec. 3301. As used in this sub-chapter:

(1) "Affiliate" means-

(A) a person who directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than a person who holds the securities-

(i) as a fiduciary or agent without sole discretionary power to vote the securities; or (ii) solely to secure a debt, if the person has not exercised the power to vote;

(B) a corporation 20 per-cent or more of whose outstanding vot-ing securities are directly or indi-rectly owned, controlled, or held with power to vote, by the debtor or a person who directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor, other than the person who holds securities-

(i) as a fiduciary or agent without sole power to vote the securities; or

(ii) solely to secure a debt, if the person has not in fact exercised the power to vote;

(C) a person whose business is operated by the debtor under a lease or other agreement, or a person substantially all of whose assets are controlled by the debtor; or

(D) a person who operates the debtor's business under a lease or other agreement or controls substantially all of the debtor's assets.

(2) "Asset" means property of a debtor, but does not include-

(A) property to the extent it is encumbered by a valid lien;

(B) property to the extent it is generally exempt under nonbankruptcy law; or

(C) an interest in real prop-erty held in tenancy by the entirety, or as part of a community estate, to extent such interest is not subject to process by the United States holding a claim against only one tenant or co-owner.

(3) "Claim" means a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, un-disputed, legal, equitable, secured, or unsecured.

(4) "Creditor" means a person who has a claim.

(5) "Insider" includes-

(A) if the debtor is an individual-

(i) a relative of the debtor or of a general partner of the debtor;

(ii) a partnership in which the debtor is a general partner;

(iii) a general partner in a partnership described in clause (ii); or

(iv) a corporation of which the debtor is a director, officer, or person in control;

(B) if the debtor is a cor-poration-

(i) a director of the debtor;

(ii) an officer of the debt-or;

(iii) a person in control of the debtor;

(iv) a partnership in which the debtor is a general partner;

(v) a general partner in a partnership described in clause (iv); or

(vi) a relative of a general partner, director, officer, or per-son in control of the debtor;

(i) a general partner in the debtor;

(ii) a relative of a general partner in, a general partner of, or a person in control of the debtor;

(iii) another partnership in which the debtor is a general part-ner;

(iv) a general partner in a partnership described in clause (iii); or

(v) a person in control of the debtor.

(D) an affiliate, or an in-sider of an affiliate as if the affiliate were the debtor; and

(E) a managing agent of the debtor.

(4) "Lien" means a charge against or an interest in property to secure payment of a debt and in-cludes a security interest created by agreement, a judicial lien obtained by legal or equitable process or proceedings, a common law lien, or a statutory lien.

(5) "Relative" means an indi-vidual related, by consanguinity or adoption, within the third degree as determined by the common law, a spouse, or an individual so related to a spouse within the third degree as so deter-mined.

(6) "Transfer" means every mode, direct or indirect, absolute or conditional, voluntary or involun-tary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease, and creation of a lien or other encumbrance.

(7) "Valid lien" means a lien that is effective against the holder of a judicial lien subsequently obtained in legal or equitable proceeding.

Insolvency

Sec. 3302. (a) In general.-Ex-cept as provid-ed in subsection (c), a debtor is insolvent if the sum of the debtor's debts is greater than all of the debtor's assets at a fair valuation.

(b) Presumption.-A debtor who is generally not paying debts as they become due is presumed to be insol-vent.

(c) Calculation.-A part-nership is insolvent under sub-section (a) if the sum of the partner-ship's debts is greater than the ag-gregate, at a fair valuation, of-

(1) all of the partnership's assets; and

(2) the sum of the excess of the value of each general partner's non-part-nership assets over the partner's non-partnership debts.

(d) Assets.-For purposes of this section, assets do not include prop-erty that is transferred, con-cealed, or removed with intent to hinder, de-lay, or defraud creditors or that has been transferred in a man-ner making the transfer voidable under this subchapter.

(e) Debts.-For purposes of this section, debts do not include an obligation to the extent such obliga-tion is secured by a valid lien on property of the debtor not included as an asset.

Value for Transfer or Obligation

Sec. 3303. (a) Transaction.--Value is given for a transfer or an obligation if, in ex-change for the transfer or obliga-tion, property is transferred or an antecedent debt is secured or satisfied, but value does not include an unper-formed promise made oth-er-wise than in the ordinary course of the promisor's business to furnish sup-port to the debtor or another person.

(b) Reasonably equiva-lent val-ue.-For the purposes of sections 3304 and 3307, a person gives a reasonably equivalent value if the person acquires an interest of the debtor in an asset pursuant to a regularly conducted, nonconclusive foreclosure sale or execution of a power of sale for the acquisition or disposition of such interest upon default under a mortgage, deed of trust, or security agreement.

(c) Present Value.-A transfer is made for present value if the ex-change between the debtor and the transferee is intended by them to be contempora-neous and is in fact substantially contemporane-ous.

Transfer Fraudu-lent as to a Debt to the United States

Sec. 3304. (a) Debt arising be-fore trans-fer.-Except as provided in section 3307, a transfer made or obligation incurred by a debtor is fraudulent as to a debt to the United States which arises before the trans-fer is made or the obligation is incurred if-

(1)(A) the debtor makes the transfer or incurs the obligation without receiving a reasonably equi-valent value in exchange for the transfer or obligation; and

(B) the debtor is insolvent at that time or the debtor becomes insolvent as a result of the transfer or obligation; or (2)(A) the transfer was made to an insider for an antecedent debt, the debtor was insolvent at the time; and

(B) the insider had reasonable cause to believe that the debtor was insolvent.

(b) Transfers without regard to date of judgment.-

(1) Except as provided in section 3307, a transfer made or obligation incurred by a debtor is fraudulent as to a debt to the United States, whether such debt arises before or after the transfer is made or the obligation is incurred, if the debtor makes the transfer or incurs the obligation-

(A) with actual intent to hinder, delay, or defraud a creditor; or

(B) without receiving a reasonably equivalent value in exchange for the transfer or obligation if the debtor-

(i) was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or

(ii) intended to incur, or believed or reasonably should have believed that he would incur, debts beyond his ability to pay as they became due.

(2) In determining actual intent under paragraph (1), consider-ation may be given, among other factors, to whether-

(A) the transfer or obligation was to an insider;

(B) the debtor retained possession or control of the property transferred after the transfer;

(D) before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit;

(E) the transfer was of substantially all the debtor's assets;

(F) the debtor absconded;

(G) the debtor removed or concealed assets;

(H) the value of the con-sideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred;

(I) the debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred;

(J) the transfer occurred shortly before or shortly after a substantial debt was incurred; and

(K) the debtor transferred the essential assets of the business to a lienor who transferred the as-sets to an insider of the debtor.

When Transfer is Made or Obli-ga-tion is In-curred

Sec. 3305. For the purposes of this sub-chap-ter:

(1) A transfer is made-

(A) with respect to an asset that is real property (other than a fixture, but including the interest of a seller or purchaser under a con-tract for the sale of the asset), when the transfer is so far perfected that a good-faith purchaser of the asset from the debtor against whom appli-cable law permits the transfer to be perfected cannot acquire an interest in the asset that is superior to the interest of the transferee; and

(B) with respect to an asset that is not real property or that is a fixture, when the transfer is so far perfected that a creditor on a simple contract cannot acquire, otherwise than under this subchapter, a judicial lien that is superior to the interest of the transferee.

(2) If applicable law permits the transfer to be perfected as ap-proved in paragraph (1) and the transfer is not so perfected before the commence-ment of an action or proceeding for relief under this subchapter, the transfer is deemed made immediately before the com-mencement of the action or proceed-ing.

(3) If applicable law does not permit the transfer to be perfected as provided in paragraph (1), the transfer is made when it becomes effective between the debtor and the transferee.

(4) A transfer is not made until the debtor has acquired rights in the asset transferred.

(5) An obligation is in-curred-

(A) if oral, when it be-comes effective between the parties; or

(B) if evidenced by a writing executed by the obligor, when such writing is delivered to or for the benefit of the obligee.

Remedies of the United States

Sec. 3306. (a) In general.-In an action or proceeding under this sub-chapter for relief against a transfer or obligation, the United States, subject to section 3307 and to applicable principles of equity and in accordance with the Federal Rules of Civil Procedure, may obtain-

(1) avoidance of the transfer or obligation to the extent necessary to satisfy the debt to the United States;

(2) a remedy under this chap-ter against the asset transferred or other property of the transferee; or

(3) any other relief the cir-cumstances may require.

(b) Limitation.-A claim for relief with respect to a fraudulent transfer or obligation under this subchapter is extinguished unless action is brought-

(1) under section 3304(b)(1)(A) within 6 years after the transfer was made or the obliga-tion was incurred or, if later, within 2 years after the transfer or obliga-tion was or could reasonably have been discovered by the claimant

(2) under subsection (a)(1) or (b)(1)(B) of section 3304 within 6 years after the transfer was made or the obligation was incurred; or

(3) under section 3304(a)(2) within 2 years after the transfer was made or the obligation was incurred.

Defenses, Liability, and Protection of Transferee

Sec. 3307. (a) Good faith trans-fer.-A trans-fer or obligation is not voidable under section 3304(b) with respect to a person who took in good faith and for a reasonably equivalent value or against any transferee or obligee subsequent to such person.

(b) Limitation.-Except as pro-vided in subsection (d), to the extent a transfer is voidable in an action or proceeding by the United States under section 3306(a)(1), the United States may recover judg-ment for the value of the asset transferred, but not to exceed the judgment on a debt. The judgment may be entered against-

(1) the first transferee of the asset or the person for whose bene-fit the transfer was made; or

(2) any subsequent transferee, other than a good faith transferee who took for value or any subse-quent transferee of such good-faith transferee.

(c) Value of assess-ment.-For purposes of subsection (b), the value of the asset is the value of the asset at the time of the transfer, subject to adjustment as the equities may re-quire.

(d) Rights of good faith trans-ferees and obli-gees.- Notwithstand-ing voidability of a transfer or an obligation under this subchapter, a good-faith transferee or obligee is entitled, to the extent of the value given the debtor for the transfer or obligation, to-

(1) a lien on or a right to retain any interest in the asset transferred;

(2) enforcement of any obligation incurred; or

(3) a reduction in the amount of the liability on the judgment.

(e) Exceptions.-A transfer is not voidable under section 3304(a) or section 3304(b)(2) if the transfer results from-

(1) termination of a lease upon default by the debtor when the termination is pursuant to the lease and applicable law; or

(2) enforcement of a security interest in compliance with article 9 of the Uniform Commercial Code or its equivalent in effect in the State where the property is located. (f) Limitation of voida-bility.-A transfer is not voidable under section 3304(a)(2)-

(1) to the extent the insider gives new value to or for the benefit of the debtor after the transfer is made unless the new value is se-cured by a valid lien;

(2) if made in the ordinary course of business or financial af-fairs of the debtor and the insider; or

(3) if made pursuant to a good-faith effort to rehabilitate the debtor and the transfer secured both present value given for that purpose and an antecedent debt of the debtor.

Supplementary Provision

Sec. 3308. Except as provided in this subchapter, the principles of law and equity, including the law merchant and the law relating to principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake, insolvency, or other validating or invalidating cause shall apply to actions and proceedings under this subchapter.