34 CFR 34.30 – Application of payments and accrual of interest

We apply payments received through a garnishment in the following order—

Garnishment: Generally, garnishment is a court proceeding in which a creditor asks a court to order a third party who owes money to the debtor or otherwise holds assets belonging to the debtor to turn over to the creditor any of the debtor
Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.

(a) To costs incurred to collect the debt;

(b) To interest accrued on the debt at the rate established by—

(1) The terms of the obligation under which it arises; or

(2) Applicable law; and

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