BVA9504707 DOCKET NO. 92-18 895 ) DATE ) ) Received from the Department of Veterans Affairs Regional Office in Los Angeles, California THE ISSUES Recovery of a direct loan post-foreclosure deficiency debt. REPRESENTATION Appellant represented by: Disabled American Veterans ATTORNEY FOR THE BOARD Michael A. Pappas, Associate Counsel INTRODUCTION The veteran served on active duty from July 1943 to May 1947. This matter came before the Board of Veterans' Appeals (the Board) on appeal from a decision on waiver of indebtedness of the Department of Veterans Affairs (VA) Phoenix, Arizona, Regional Office's Committee on Waivers and Compromises (RO). A September 1990 decision on waiver of indebtedness denied the veteran's request for a waiver of recovery of his post-foreclosure deficiency indebtedness in the amount of $11,794.02, plus accrued interest. The appeal was received and docketed at the Board in October 1992. The veteran has represented himself throughout his appeal. Preliminarily, the Board notes that the veteran expressed an objection to the timing and the manner in which he was notified of the foreclosure of his direct VA loan. Having transferred the subject property used as security for that loan, the veteran was unable to monitor whether the transferee, his wife's daughter, was fulfilling the loan payment obligations. The veteran admits that he eventually became aware of the foreclosure, but only several days before the foreclosure sale. He believes that the VA should have made a special effort to contact him earlier; especially since he receives VA disability compensation and his address was easily ascertainable. Typically, a dispute of this nature is construed by the VA as a challenge to the validity of the debt. In the face of such a challenge, it is incumbent upon the VA to determine whether the veteran was accorded the requisite due process that would allow the pursuit of collection of a veteran's debt, and by the same token, the further consideration of a waiver of that debt. See Schaper v. Derwinski, 1 Vet.App. 430 (1991). In July 1990, with commendable foresight, the Loan Guaranty Officer at the RO made such a determination. The Board will defer the review of that determination pending completion of the requested development that is the subject of this remand. REMAND The Board notes that the last financial information provided by the veteran was dated in June 1991. In an evaluation of whether "equity and good conscience" necessitate a favorable waiver decision, all of the specifically enumerated elements found in 38 C.F.R. § 1.965(a) (1993) must be considered. A fundamental area of consideration contained within the specifically enumerated elements is whether there would be imposed an undue hardship of collection upon the veteran. The proper analysis of "undue hardship" should take into consideration not only the veteran's current financial picture, but also a realistic projection of his status in the foreseeable future. It is noted that the most recent financial information submitted by the veteran does not include any income that may be derived from the veteran's spouse. To the extent that the veteran's spouse shares financial resources with the veteran for the purpose of funding the basic necessities of life, or is able to contribute to the payment of any family expenses including the veteran's debt obligations, her financial information is relevant. Secondly, in the last financial status report submitted by the veteran, he appeared to own substantial assets. He indicated, however, that he had been unemployed for a considerable period of time, and that he would likely have to liquidate some of his real estate assets if he did not obtain employment. He has also intimated that he is considering retirement altogether. Finally, there appears to be a severe discrepancy with respect to some of the financial information provided thus far by the veteran. VA has a duty to assist a veteran in the development of facts pertinent to his claim. 38 U.S.C.A. § 5107(a) (West 1991); 38 C.F.R. § 3.103(a) (1993). The veteran's financial information and the verification of that information are crucial to the issue. As such, VA's duty to assist includes a reasonable effort to obtain that information. However, "[T]he duty to assist is not always a one-way street. If a veteran wishes help, he cannot passively wait for it in those circumstances where he may or should have information that is essential in obtaining the putative evidence." Wood v. Derwinski, 1 Vet.App. 190 (1991). Under the aforementioned circumstances, the Board finds it necessary that the case be REMANDED to the RO for the following actions: 1. The veteran should be provided with a copy of this remand and another financial status report form (VA Form 4-5655) and asked to provide a current financial status report. The RO should also request from the veteran complete copies, including all scheduled attachments, of his Federal income tax returns for 1986 through 1993, along with the updated financial status report. The current financial status report should include financial information regarding the veteran's spouse. To the extent possible, the veteran should provide written documentation or verification of all items contained in the financial status report, particularly the monthly expenditures applied toward food, telephone, and clothing. The veteran should also provide copies of all Internal Revenue Service Forms 1099 that have been issued on his behalf. 2. The veteran should be permitted to submit or identify any additional evidence or arguments in support of his appeal. The RO should assist him in obtaining identified evidence. 3. The RO should review the case to determine whether the appellant is entitled to a waiver of recovery of his post- foreclosure deficiency indebtedness based upon the principles of "equity and good conscience." If the RO determines that the veteran is not so entitled, he should be provided with a supplemental statement of the case specifically addressing the laws and regulations concerning the "equity and good conscience" standards used in determination of whether a waiver should or should not be granted. An effort should be made by the RO to specifically address those of the six enumerated elements appearing in 38 C.F.R. § 1.965(a) (1993), or any other criteria, used in the determination. Thereafter, and if otherwise appropriate, the case should be returned to the Board for further consideration. The purpose of this remand is to procure clarifying data, and to ensure due process of law. The Board intimates no opinion, legal or factual, as to the determination warranted in this case by reason of this remand. No action by the veteran is required until he is so notified. JANE E. SHARP Member, Board of Veterans' Appeals The Board of Veterans' Appeals Administrative Procedures Improvement Act, Pub. L. No. 103-271, § 6, 108 Stat. 740, ___ (1994), permits a proceeding instituted before the Board to be assigned to an individual member of the Board for a determination. This proceeding has been assigned to an individual member of the Board. Under 38 U.S.C.A. § 7252 (West 1991), only a decision of the Board of Veterans' Appeals is appealable to the United States Court of Veterans Appeals. This remand is in the nature of a preliminary order and does not constitute a decision of the Board on the merits of your appeal. 38 C.F.R. § 20.1100(b) (1994).