§1631g Payment of Debts

Summary

The President’s designee must use any property or the money from selling it that became theirs under the law to pay debts owed by the person who owned that property right before it passed to the designee. Claims cannot be paid if they are against Bulgaria, Hungary, or Rumania (including their governments or agencies), if they are payable in any currency other than U.S. dollars, or if the debt was not already due on the country-specific dates: October 9, 1940 for Rumania, March 4, 1941 for Bulgaria, and March 13, 1941 for Hungary. Any defenses the original debtor had can be used by the designee, and the time from December 7, 1941 onward does not count for statutes of limitations. Allowed claimants include U.S. citizen creditors at the time the debt was created, other people who have lived continuously in the U.S. since December 7, 1941, U.S. corporations, and those claims acquired by the designee. Heirs and legal successors can be paid like the original claimants. The designee sets filing deadlines and must publish at least 60 days’ notice in the Federal Register; the deadline cannot go past one year after the last vesting of the debtor’s property. No payments will be made before 120 days after the first notice, and money for payments can only come from the net proceeds left after the designee’s expenses, taxes, and any cash reserve. The designee reviews claims and decides what to allow. A decision that a claim is barred because of the country or currency rules is final and not reviewable in court. If allowed claims fit the available money, the designee pays them and tells anyone whose claim was denied. A claimant has 60 days to ask the U.S. District Court in Washington, D.C., to review a denial; the designee must file the claim record in 45 days. If allowed claims exceed funds, the designee sends a payment schedule, and claimants can seek court review within 60 days; the court can change the schedule and order payments. Payments are made in priority order: wages and salaries up to $600 first, then certain federal-priority claims, then other service/rent/supply claims, then all other claims. The designee does not have to sell property by court order to pay claims, and buyers or other transferees of the property are not made responsible for the old owner’s debts just because they bought or received the property. Payment by the designee discharges the debt to the amount paid.