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Question: 1 / 875

What does the term "administrative offsets" refer to in debt management?

The repurposing of tax dollars for different use

The use of funds from other accounts to settle debts

The term "administrative offsets" in debt management refers to the practice of using funds from other accounts to settle debts owed to the government. This mechanism allows the government to reclaim funds directly from a debtor’s accounts, such as tax refunds, social security payments, or other disbursements. By applying these funds toward outstanding debts, the government effectively reduces the liability without requiring a separate collection process.

This approach streamlines debt recovery and ensures that the government can efficiently manage its receivables while minimizing administrative costs associated with debt collection. Unlike other options such as the repurposing of tax dollars or the complete write-off of uncollectible debts, administrative offsets focus specifically on the direct application of available funds from existing governmental accounts to settle outstanding debts.

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The collection process for settled loans

The complete write-off of uncollectible debts

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