(1) Upon the department's acceptance of a debt for collection services, the debt is transferred to the department.

(2) Once a debt has been transferred to the department, the submitting agency shall:

(a) write off the debt;

(b) cease all collection activities on the debt;

(c) forward to the department any payment received by the agency; and

(d) update the department with any information received relating to the debt, including notification that the debtor filed for bankruptcy or has new contact information.

(3) If the submitting agency receives payment on a debt that has been collected in full, the agency shall refund the overpayment to the debtor.