Except as required by other applicable regulation or statute, a debt or part thereof owed CCC shall be discharged and the records and accounts on that debt closed in the following situations:

When an obligation or part thereof is discharged in bankruptcy;

When an obligation or part thereof is the subject of a final judgment entered by a court of competent jurisdiction which is adverse to CCC;

When a debt or part thereof is compromised and paid, the amount of such compromise;

When collection of a debt by administrative offset is barred in accordance with § 1403.7(s)(5).

A debt or part thereof owed CCC may be discharged and the records and accounts on that debt closed when the Controller, CCC, has determined that such action is in the best interest of CCC.

A claims official or claims officer may discharge a delinquent debt if such debt arises under the terms of the authority delegated to such official or officer in the following circumstances:

The delinquent debt is owed by an entity which has been liquidated or dissolved and no legal remedy is feasible.

The delinquent debt is owed by an individual who:

Is declared legally insane or incompetent;

Possessed of no assets or other means of payment; and

Possessed of no reasonable prospects of being able to pay the debt in the future.

The delinquent debt was incurred by an individual who is deceased, and from whose estate recovery cannot be made.

Debts discharged in accordance with this section may be reported to the Internal Revenue Service pursuant to § 1403.19.