BVA9503802 DOCKET NO. 93-06 415 ) DATE ) ) On appeal from the decision of the Department of Veterans Affairs Regional Office in Phoenix, Arizona THE ISSUE Recovery of the loan guaranty indebtedness. REPRESENTATION Appellant represented by: Disabled American Veterans ATTORNEY FOR THE BOARD Michael A. Pappas, Associate Counsel INTRODUCTION The appellant served on active duty from June 1965 to June 1969. This matter came before the Board of Veterans' Appeals (the Board) on appeal from a decision of the Phoenix, Arizona, Department of Veterans Affairs (VA) Regional Office's Committee on Waivers and Compromises (RO). In January 1992, the appellant had requested a waiver of his loan guaranty indebtedness, determined to be in the amount of $21,362.71. An April 1992 decision on waiver of indebtedness by the RO granted the appellant a partial waiver of his indebtedness in the amount of $10,681.36, plus accrued interest, but denied a waiver as to the remainder of the indebtedness, in the amount of $10,681.35, plus accrued interest. The appeal was received and docketed at the Board in March 1993. The appellant has been represented throughout his appeal by Disabled American Veterans. The appellant has not challenged the validity of the loan guaranty indebtedness. Accordingly, the Board limits its consideration to the issue shown on the preceding page. REMAND From the onset of the appellant's appeal, one of his primary contentions is that the collection of the loan guaranty indebtedness by the VA would create an undue hardship to the appellant. The Board notes that the last financial information provided by the appellant was submitted in January 1993, which was subsequent to the August 1992 Statement of the Case. According to pertinent regulatory criteria, evidence submitted by an appellant which is accepted by the Board must be referred to the RO for review and preparation of a supplemental statement of the case unless this procedural right is waived by the appellant. Since such a waiver was not provided in this case, this evidence must be referred back to the RO. 38 C.F.R. § 20.1304(c) (1994). Further, it is noted that the appellant is employed as a real estate broker. At the end of his April 1992 hearing, the appellant suggested that the real estate market as a whole is subject to dramatic fluctuations, both up and down. Since this prognosis is portentous of significant financial change, an updated financial status report, and the verification of the information provided, would be beneficial to the resolution of this appeal. Further, there appears to be some question as to the value of the appellant's personally owned real estate company, and an additional question as to whether he continues to own an interest in certain trust property declared to be in trust in March 1986. The verification of that information would also be probative of the issue on appeal. With respect to the necessity for the requirement that the appellant provide verification of his most current financial status, it is important to remember that in an evaluation of whether "equity and good conscience" necessitates a favorable waiver decision, although not exhaustive, there must be considered all of the specifically enumerated elements found in 38 C.F.R. § 1.965(a) (1994). 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- appellant. The proper analysis of "undue hardship" should take into consideration not only the appellant's current financial picture, but also a realistic projection of his status in the foreseeable future. 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) (1994). The appellant's financial information and the verification of that information are crucial to that issue. As such, VA's duty to assist a veteran 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 circumstances, the Board is compelled to remand this case to the RO for the following actions: 1. The appellant 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 appellant complete copies, including all scheduled attachments, of his Federal income tax returns for 1992 through 1994, along with the updated financial status report. Complete copies of any corporate tax returns filed by, or on behalf of any corporation in which the appellant is a principal should also be provided. The current financial status report should include financial information of any Trust property in which the appellant has an interest as a beneficiary, including that governed by the Trust Agreement entered into by the appellant on March 14, 1986, or a successor Trust Agreement. To the extent possible, the appellant should provide written documentation or verification of all items contained in the financial status report, particularly the monthly expenditures applied to other creditors. 2. The appellant's claim should be reviewed by the RO. If the benefit sought continues to be denied, the appellant should be provided with a supplemental statement of the case. That supplemental statement of the case should specifically address those of the six elements found in 38 C.F.R. § 1.965 which the RO considers to be pertinent to the determination of whether the appellant should be accorded a waiver of his loan guaranty indebtedness under the standards of "equity and good conscience." In particular, the fault of the appellant versus the fault of the VA, the possibilities for unjust enrichment, and the possibility of undue hardship should be addressed. The RO should also identify any other elements that should be applied to the facts and circumstances of this case indicating a need for reasonableness and moderation in the exercise of the Government's rights, such as whether the appellant attempted to mitigate the amount of the indebtedness through efforts to avoid foreclosure or through the proper maintenance of the subject property. If the benefit sought is not granted, the appellant should be given an adequate opportunity to respond prior to the forwarding of the appeal to the Board. 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 appellant is required, until he is so notified. THOMAS J. DANNAHER 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).