(b) Prohibition of loans for borrowers that have received debt forgiveness
(1) Prohibitions
Except as provided in paragraph (2)—
(A) the Secretary may not make a loan under this chapter to a borrower that has received debt forgiveness on a loan made or guaranteed under this chapter; and
(B)
the Secretary may not guarantee a loan under this chapter to a borrower that has received—
(i) debt forgiveness after April 4, 1996, on a loan made or guaranteed under this chapter; or
(ii) received debt forgiveness on more than 3 occasions on or before April 4, 1996.
(2) Exceptions
(A) In general
The Secretary may make a direct or guaranteed farm operating loan for paying annual farm or ranch operating expenses of a borrower who—
(i) was restructured with a write-down under
section 2001 of this title;
(ii) is current on payments under a confirmed reorganization plan under chapters 11, 12, or 13 of title 11; or
So in original. Probably should be “chapter”.
(iii) received debt forgiveness on not more than 1 occasion resulting directly and primarily from a major disaster or emergency designated by the President on or after April 4, 1996, under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (
42 U.S.C. 5121 et seq.).
(B) Emergency loans
The Secretary may make an emergency loan under
section 1961 of this title to a borrower that—
(i) on or before April 4, 1996, received not more than 1 debt forgiveness on a loan made or guaranteed under this chapter; and
(ii) after April 4, 1996, has not received debt forgiveness on a loan made or guaranteed under this chapter.
References in Text
For definition of “this chapter”, referred to in text, see note set out under section 1921 of this title.
The Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsec. (b)(2)(A)(iii), is Pub. L. 93–288, May 22, 1974, 88 Stat. 143, as amended, which is classified principally to chapter 68 (§ 5121 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 5121 of Title 42 and Tables.
Amendments
2002—Subsec. (b)(2)(A)(iii). Pub. L. 107–171 added cl. (iii).
1998—Subsec. (b). Pub. L. 105–277 added subsec. (b) and struck out heading and text of former subsec. (b). Text read as follows:
“(1) In general.—Except as provided in paragraph (2), the Secretary may not make or guarantee a loan under this chapter to a borrower who received debt forgiveness on a loan made or guaranteed under this chapter.
“(2) Exception.—The Secretary may make a direct or guaranteed farm operating loan for paying annual farm or ranch operating expenses of a borrower who was restructured with a write-down under section 2001 of this title.”