We apply payments received through a garnishment in the following order—

1. (a) To costs incurred to collect the debt;

2. (b) To interest accrued on the debt at the rate established by—

   1. (1) The terms of the obligation under which it arises; or
   2. (2) Applicable law; and

3. (c) To outstanding principal of the debt.

   (Authority: 31 U.S.C. 3720D)