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B-205373 1 (1982-04-02)

handle is hein.gao/gaobadket0001 and id is 1 raw text is: d' TECOMPYROLLUM UQNUAL. DECIUION OP, THU UNITED TATUEM WAUHI1f TON, Do 9 054U FILE: B-205373 DATE: April 2, 1982 MATTER ON.,Leland M, Wilson--Setoff against indebtedness 'discharged in bankruptcy DIGEBT: Employee resigned and became indebted to the Government for violation of training and relocation service agreements. Agency filed notice of indebtedness with Office of Personnel Management (OPM). Indebtedness was discharged in bankruptcy, and employee subsequently filed for refund of retire- ment contributions. Setoff against retirement contributions did not occur upon agency filing notice with OPti setoff can only happen when employee files for refund. Agency, which received em- ployee's contributions from OPM, may not now attempt to set off these contri- butions against an indebtedness which had been discharged in bankruptcy, Contributions must be paid to employee. ISSUE The issue in this decision is whether an agency may set off an amount representing a former employee's contri- bution to the Civil Service Retirement Fund against a debt owed to the United States, after that debt has been dis- charged in bankruptcy. We hold that, since the debt to the United States has been discharged in bankruptcy, the agency may not set off funds which are otherwise payable to the former employee. The setoff against the employee's retirement contributions could not take effect until the employee applied for a refund, which was after the indebt- edness had been discharged in bankruptcy. BACKGROUND This decision is in response to a request for an ad- vance decision from F. P. Cantrell, Chief, Accounting Division, Western Region, Federal Aviation Administration (FAA). We have also received a claim from Mr. Leland M. Wilson, a former employee of the FAA, for return of hiu retirement contributions in the amount of $12,398.91, the amount which is being withheld by the FAA.

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