7 CFR § 761.406 - Types of debt settlement.
---
identifier: "/us/cfr/t7/s761.406"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "7 CFR § 761.406 - Types of debt settlement."
title_number: 7
title_name: "Agriculture"
section_number: "761.406"
section_name: "Types of debt settlement."
chapter_name: "FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE"
subchapter_number: "D"
subchapter_name: "SPECIAL PROGRAMS"
part_number: "761"
part_name: "FARM LOAN PROGRAMS; GENERAL PROGRAM ADMINISTRATION"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "5 U.S.C. 301 and 7 U.S.C. 1989."
regulatory_source: "72 FR 63285, Nov. 8, 2007, unless otherwise noted."
cfr_part: "761"
---
# 761.406 Types of debt settlement.
(a) *Compromise.* The Agency may compromise a debt owed to the Agency if the requirements of this subpart are met and:
(1) The borrower pays a lump sum as a compromise for the remaining unsecured debt; and
(2) The amount is reasonable based on the Agency's determination of what the borrower can pay to settle the debt.
(b) *Adjustment.* The Agency may settle a debt owed to the Agency through an adjustment agreement if the requirements of this subpart are met and:
(1) The borrower agrees to pay the adjustment amount for a period of time not to exceed 5 years; and
(2) The amount is reasonable based on the Agency's determination of what the borrower can pay to settle the debt; and
(3) The borrower provides documentation that funds are, or will be, available to pay the adjustment offer through its term.
(c) *Cancellation.* The Agency may cancel a debt owed to the Agency if the requirements of this subpart are met and the application and supporting documents indicate that the borrower is unable to pay a compromise or adjustment offer.