5 C.F.R. § 845.205 – Collection of debts.

(a) Means of collection. Collection of a debt may be made by means of offset under § 845.206, or under any statutory provision providing for offset of money due the debtor from the Federal Government, or by referral to the Justice Department for litigation, as provided in § 845.206. Referral may also be made to a collection agency under the provisions of the FCCS.
(b) Additional charges. Interest, penalties, and administrative costs will be assessed on the debt in accordance with standards established in the FCCS at 4 CFR 102.13. Additional charges will be waived when required by the FCCS. In addition, such charges may be waived when OPM determines—
1. (1) Collection would be against equity and good conscience under the standards prescribed in §§ 845.303 through 845.305; or
2. (2) Waiver would be in the best interest of the United States.
(c) Collection in installments.
1. (1) Whenever feasible, debts will be collected in one lump sum.
2. (2) However, installments payments may be effected when—
  1. (i) The debtor establishes that he or she is financially unable to pay in one lump sum; or
  2. (ii)
    1. (A) The benefit payable is insufficient to make collection in one lump sum;
    2. (B) The debtor fails to respond to a demand for full payment; and
    3. (C) Offset is available.
3. (3) The amount of the installment payments will be set in accordance with the criteria in 4 CFR 102.11.
(d) Commencement of collection.
1. (1) Except as provided in paragraph (d)(2) of this section, collection will begin after the time limits for requesting further rights stated in § 845.204(a)(6) expire or OPM has issued decisions on all timely requests for those rights and the Merit Systems Protection Board has acted on any timely appeal of a waiver denial, unless failure to make an offset would substantially prejudice the Government's ability to collect the debt; and the time before the payment is to be made does not reasonably permit the completion of the proceedings in § 845.204 or litigation. When offset begins without completion of the administrative review process, these procedures will be completed promptly, and amounts recovered by offset but later found not owed will be refunded promptly.
2. (2) The procedures identified in § 845.204 will not be applied when the debt is caused by a retroactive adjustment in the periodic rate of annuity or any deduction taken from annuity when the adjustment is a result of the annuitant's election of different entitlements under law, if the adjustment is made within 120 days of the effective date of the election; or interim estimated payments made before the formal determination of entitlement to annuity, if the amount is recouped from the total annuity payable on the first day of the month following the last advance payment or the date the formal determination is made, whichever is later.