CFR > Title 7 - Agriculture > SUBTITLE B—Regulations of the Department of Agriculture > CHAPTER XVIII—RURAL HOUSING SERVICE, RURAL BUSINESS-COOPERATIVE SERVICE, RURAL UTILITIES SERVICE, AND FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE (parts 1804 to 2045) > SUBCHAPTER H—PROGRAM REGULATIONS (parts 1900 to 1981) > PART 1962—PERSONAL PROPERTY > SUBPART A—Servicing and Liquidation of Chattel Security (§1962.1 to §1962.50) > 1962.41—Sale of chattel security or EO property by borrowers.

1962.41—Sale of chattel security or EO property by borrowers.

Borrowers who are liquidating voluntarily and who have not been sent exhibit A and attachments 1 and 2 or 1, 3 and 4 of subpart S of part 1951 of this chapter will be processed in accordance with paragraph (a)(1) of § 1962.40 of this subpart before any sale occurs.
(a) Public sale. A borrower may voluntarily liquidate chattels by selling the property at auction in the borrower's own name. RD 455-3, “Agreement for Sale by Borrower (Chattels and/or Real Estate)”, will be executed by the borrower, all lienholders, and the clerk of the sale or other person who will receive the sale proceeds before execution by the County Supervisor. When EO property is involved delete from the Agency lien wherever it appears on the forms. No Agency official is authorized to bid at such sales. The County Supervisor will arrange to promptly receive the proceeds of the sale due the Agency for application on the borrower's indebtedness.
(b) Private sale. The borrower may sell chattel security or EO property at a private sale if:
(1) (i) The borrower has ready purchasers and can sell all of the property for its present market value; or
(ii) The property is perishable; or
(iii) The property is of a type customarily sold on a recognized market; or
(iv) The property consists of items of small value or a limited number of items which do not justify public sale.
(2) Form FmHA or its successor agency under Public Law 103-354 1962-1 may be used to approve liquidation of such security. The County Supervisor will document in the running case record the reasons that a public sale was not justified.
(3) Form FmHA or its successor agency under Public Law 103-354 455-3 is completed before the sale.
(c) Government takes possession. The borrower may also turn over possession of the chattels to the agency by signing Form RD 455-4, “Agreement for Voluntary Liquidation of Chattel Security.” This form authorizes the agency to sell the security at either public or private sale. If the agency hires a caretaker, services should be obtained by use of Form AD-838, “Purchase Order.”
(d) Record of Sale. The sale will be recorded on Form FmHA 1962-1.
(e) Unpaid debt. If the sale of all security results in less than full payment of the debt, the borrower may request debt settlement of the remaining debt. The servicing official will consult with the County Committee before determining if the borrower's account can be debt settled in accordance with subpart B of part 1956 of this chapter.

Code of Federal Regulations

[50 FR 45783, Nov. 1, 1985, as amended at 51 FR 13482, Apr. 21, 1986; 53 FR 35785, Sept. 14, 1988; 56 FR 15825, Apr. 18, 1991; 57 FR 60085, Dec. 18, 1992; 62 FR 10157, Mar. 5, 1997; 68 FR 7701, Feb. 18, 2003]