Code of Federal Regulations Title 38. Pensions, Bonuses, and Veterans' Relief § 38.1.965 Application of standard

(1) Fault of debtor. Where actions of the debtor contribute to creation of the debt.

(2) Balancing of faults. Weighing fault of debtor against Department of Veterans Affairs fault.

(3) Undue hardship. Whether collection would deprive debtor or family of basic necessities.

(4) Defeat the purpose. Whether withholding of benefits or recovery would nullify the objective for which benefits were intended.

(5) Unjust enrichment. Failure to make restitution would result in unfair gain to the debtor.

(6) Changing position to one's detriment. Reliance on Department of Veterans Affairs benefits results in relinquishment of a valuable right or incurrence of a legal obligation.

(1) Fraud or misrepresentation of a material fact (see § 1.962(b)).

(2) Bad faith. This term generally describes unfair or deceptive dealing by one who seeks to gain thereby at another's expense. Thus, a debtor's conduct in connection with a debt arising from participation in a VA benefits/services program exhibits bad faith if such conduct, although not undertaken with actual fraudulent intent, is undertaken with intent to seek an unfair advantage, with knowledge of the likely consequences, and results in a loss to the government.