1.After the department has paid a loss on a defaulted loan and has entered a statement of claim in which it determines and sets forth the existence, nature and amount of the money due it by the defaulting borrower and a proposed payment schedule, the department may issue an order directing any employer of the borrower to withhold or pay over to the department money due or to become due to the department.
2.Before issuing the order as provided in subsection 1 of this section, the department shall serve on the borrower the statement of claim and shall inform the borrower that the department intends to initiate proceedings to collect the debt through deductions from earnings. The department shall also provide a copy of this section or an explanation of the borrower's rights under this s
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1. After the department has paid a loss on a defaulted loan and has entered a statement of claim in which it determines and sets forth the existence, nature and amount of the money due it by the defaulting borrower and a proposed payment schedule, the department may issue an order directing any employer of the borrower to withhold or pay over to the department money due or to become due to the department.
2. Before issuing the order as provided in subsection 1 of this section, the department shall serve on the borrower the statement of claim and shall inform the borrower that the department intends to initiate proceedings to collect the debt through deductions from earnings. The department shall also provide a copy of this section or an explanation of the borrower's rights under this section.
3. The department shall provide the borrower with an opportunity to inspect and copy records related to the defaulted loans.
4. The department shall provide the borrower with the opportunity to enter into a written agreement with the department under terms agreeable to the department to establish a schedule for the repayment of the debt.
5. The department shall provide the borrower with the opportunity to have a hearing before an impartial hearing officer appointed by the department but who is not under the control or supervision of the board or department. The procedures for the hearing shall be the same as those for contested cases under chapter 536 . Upon the borrower's filing of a request for a hearing in compliance with the rules of the board, the department shall stay the commencement of collection proceedings for the debt described in the statement of claim until the department issues an order provided for in subsection 6, 7, or 8, of this section.
6. At the earliest practicable date but not later than sixty days after the filing of the request for the hearing, the hearing officer shall file with the department his written decision which states specifically his findings in regard to those matters set forth in the department's statement of claim. The hearing officer shall also determine and include in his decision the terms of the repayment schedule which shall be the same as that set forth by the department in its statement of claim unless he finds no good cause to enter that schedule. Upon receipt of the hearing officer's decision, the department shall issue an order to pay debt which adopts the findings in the decision as to the existence, nature and amount of the debt and as to the repayment schedule.
7. When a borrower properly requests a hearing under the board's rules and when the hearing officer does not issue a decision within sixty days of the department's having received the request for the hearing, the department shall issue an order withdrawing the statement of claim and serve it upon the borrower with a copy of this subsection. After such an order is entered, the department shall not use the provisions of this section in regard to the loans set forth in the statement of claim, but may use any other remedy provided by law to recover the moneys owed the department. The order issued by the department shall not have the effect of precluding any other administrative or judicial tribunal from deciding any claim brought by the department or other party against the borrower or from deciding any factual or legal issue relevant to such claim.
8. When a borrower does not make a proper timely request for a hearing, the department may issue and serve on the borrower an order to pay debt which contains as its provisions the content of the statement of claim including the proposed repayment schedule.
9. The borrower may seek judicial review of any order to pay debt under sections 536.100 to 536.140 .
10. Upon issuing an order to pay debt, but not less than thirty days after the statement of claim was served on the borrower, the department may issue an order to withhold earnings which directs any employer of the borrower to withhold and pay over to the department money due or to become due the borrower. The employer shall withhold from the earnings the amount specified in the order, except that the total amount withheld shall not exceed ten percent of the borrower's earnings after deduction from those earnings of any amount required by law to be withheld. When the borrower voluntarily makes a written request that money due or to become due him be withheld or applied to the debt or that more than the ten percent maximum be withheld from his earnings, the employer shall comply with that request as if so ordered by the department.
11. Subject to the provisions of section 454.505 , an order to withhold earnings shall have the same force and effect in regard to the employer as any other garnishment.
12. No employer or other payor who complies with an order to withhold earnings shall be liable to the borrower, or to any other person claiming rights derived from the borrower, for wrongful withholding. An employer who fails or refuses to withhold or pay the amounts as ordered under this section shall be liable to the department in an amount equal to the amount which became due the department during the relevant period and which, under the order, should have been withheld and paid over.
13. An employer shall not discharge, refuse to hire or otherwise discipline an employee as a result of an order to withhold and pay over certain money authorized by this section. Any employer who does so is guilty of an infraction.
14. Service on the borrower or on the employer pursuant to this section or pursuant to rules promulgated under this section may be made on the borrower or employer, respectively or on other party in the manner provided for service of process in a civil action by a duly authorized process server appointed by the department, or by certified mail, return receipt requested, to the borrower's last known address or to the employer's address. The department may appoint any disinterested party, including, but not necessarily limited to, employees of the department, to serve such process. For purposes of this section, a borrower or an employer who does not accept receipt of service by certified mail or a borrower who has not provided the department his new or correct address is deemed to have been served as of the date on which the certified mail is mailed.
15. The board may promulgate rules to carry out the provisions of this section, including, but not limited to, rules pertaining to proceedings before the hearing officer and before the department and rules pertaining to procedures to be followed by employers to comply with the order to withhold and pay over earnings.