Page 1050

COMBINED MANUAL

ISSUE DATE 08/2016

CLAIM COMPROMISE & TERMINATION

0025.12.03.09

or pre-trial diversion and claims that have already been referred to the Minnesota Collection Enterprise (MCE) or the Treasury Offset Program (TOP).

NOTE: In March, 2004 MCE changed its name to Collection Division of the Department of Revenue. The codes and process for debt referral will continue to be referred to as MCE on MAXIS.

● At least 50% of the total amount owed on the claims in the account has been repaid prior to the compromise proposal.

● The debtor repays 50% of the remaining balance within 90 days of the compromise proposal.

All forms of recovery can be credited in determining whether a debtor meets the 50% payment requirement.

CLAIM TERMINATION POLICY

A claim may be terminated and the claim balance adjusted to 0 when there is no realistic prospect for future recovery. This practice differs from a write off which is an accounting mechanism to remove a claim as an accounts receivable asset even though the claim is retained against the possibility of future recovery. All terminated claims are automatically written off, but claims that are written off are not necessarily terminated.

Terminate claims when:

● The only responsible debtor for a claim has died and no future recovery actions are available.

OR ● The only responsible debtor for a claim has had that debt discharged by federal bankruptcy court in a Chapter 7 or Chapter 13 proceeding.

OR ● A claim is the sole responsibility of a debtor who resides in a Long Term Care Facility, there is no prognosis for a return to residential living in the community and there is no estate to repay the claim or there are existing commitments to repay higher priority obligations.

OR ● Initial notification on a claim occurred at least 10 years previous, there has been no recovery on any of the claims in the debtor’s MAXIS account in the preceding 6 years, criminal restitution is no longer required by district court, there is no docketed judgment and the debt is not certified for Revenue Recapture or the federal Treasury Offset Program (TOP).