CFR /  Title 34  /  Part 34  /  Sec. 34.30 Application of payments and accrual of interest.

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

(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

(c) To outstanding principal of the debt. (Authority: 31 U.S.C. 3720D)