FEDERAL CLAIMS COLLECTION ACT OF 1966, 31 U.S.C. 9521

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CIA-RDP84-00780R002000030003-6
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December 12, 2016
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July 29, 2002
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3
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January 29, 1968
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Approved For Release 2002/08/15 : CIA-RDP84-00780R002000030003-6 Irl 29 January 1968 OGC 68-0148 MEMORANDUM FOR: Deputy Director for Support SUBJECT: Federal Claims Collection Act of 1966, 31 U.S.C. 9521 1. The Federal Claims Collection Act of 1966 empowers agency heads or their designees to settle claims by the government up to $20, 000 in accordance with regulations promulgated by the agency, such regulations to be in conformance with those issued jointly by the Attorney General and the Comptroller General. As you know, the authorities contained in this Act have not been imple- mented by this Agency, and it would seem in our interest to implement them. We will be happy to assist you. 2. Attached for your information is a copy of the Act as it appears in the United States Code and a copy of the joint regulations 25X1 issued by the Comptroller General and the Attorney General_ HOUSTON General Counsel Attachments Approved For Release 2002/08/15 : CIAO Rd Approved For Release 2002/08/15 : CIA-RDP84-0078OR002000030003-6 MONEY AND FINANCE ' ? 31 ? 952 U)y' foreign currencies held by the United States which have been or :;;5y be reserved or set aside for specified programs or activities of any .zoncy of the Government may he used by Federal agencies for any au- purpose, except (1) that reimbursement shall be-lnade to the Treasury from applicable appropriations of the agency concerned, and (2) ;luit any foreign currencies so used shall be replaced when needed for the purpose for which originally reserved or set aside, Pub.L. 89-677, Oct. 5 f);a;. Yteserved foreign currencies; use by Federal agencies-' rein. lu, 1066, 80 kitat, 065, (?n,lifkation. Section was enacted by t1)-677 and not by Pub-L. 60-175 wi ieh comprises this chapter. CHAPTER 18.-COMPROMISE AND COLLECTION OF P.ub.L. 89-508, ? 2, July 19, 1966, 80 Stat. 308. Library references: United States C-T5% ; C.J.S. United States ii 332, 1351. service, Government corporation, instrumentality, or other 'establish- ment of body in either the executive or legislative branch, of the Fed- eral Government; (b) ""head of an agency" includes, where applicable, commission,, Sec. (c) Conch:slve effect of conipro- raise; fraud, misrcpresenta- Lion; false claims, mutual mistake of fact. 053. Existing agency authority to litl- gntc. settle, compromise, or close (a) "agency"? means any department, office, commission, board, Definll ions. Collection and compromise. (a) Agency collection;. rules and regulations. (b) Compromise of_ claims; terml- ? 0111.. Pcflnilions . In. this chapter- Lffcctfi?o Date. Section 5 of Pub;L. i;0-609 provided Mint: "This Act [enact- ing this chapter) shall become effective an the one hundred and eightieth day following the (Into of its enactment [July 10, 10661." any ni,gnlzicant sum thereon or that the cost of collecting the claim is mulgated jointly by the Attorney General and the Comptroller General, may. (1) compromise any such claim, or (2). cause collection action on any such claim to be terminated or suspended where it nnnears that an nprcnn n ac on and that (lo not exceed $20,000, exclusive of interest, the' head of an agency or his designee, pursuant to regulations prescribed by him and in conformity with such standards as may be pro- been referred to another agency, including the General Accounting Office, for further collectio ti arising out or the activities of, or referred to, his agency. Compromise of claims terminntion of collection actions rules and reguintionss 520,000 limitation d l atluIIS (a) The head of an agency or his designee, pursuant to regulations pre- scribed by him and in conformity with such standards as may be promul- gated jointly by the Attorney General and the Comptroller General, shall attempt collection of all claims of the United States for money or property Short Title. Section 1 of rub.L. &0- 509.Provided : "That this Act [enacting this chapter] may be cited ns the 'Fed- erni Cinlms Collection Act of 1066'." Legislative history: For legislative history and purpose of Pob.f,. S0- O8, see 1006 U.S.Codo' Cong. and Adnl News, p. ? 0112. Coli.ction and compromise-Agency collection; miles and reg- Approved'For Release 2002/08/15'.: CIA-RDP84-00780R002000030003-6 " Approved For Release 2002/08/15 : CIA-RDP84-00780R002000030003-6 MONEY AND 031- ? 952, FINANCE nicely to exceed the amount of recovery. The Comptroller General or his designee shat, hwn ti, e?~? ,6vtluy cor ruruier collection action. The ]lead of an agency or Ills designee shall npt exercise the fore- going authority with rnsnnnr t? ., ,a,.,...:- . _ _ .. . .. the 111-1. rile uomptroller General of United States, have authority to rn,,,n~n>, ;b ~.... 1.1 ,iq, Iiig an interest in the claim, or a claim, based in whole or in part on cnndrirt ;,, ,?(n,n,.i a ..-_ Colle.tislyetles4 effect of eoinpl?oni]aet friuul, misrepreselltntlon, false, C]iliili9 1, { , MI till. m,stakc o#. filet (c) A compromise effected pursuant to authority conferred by subset- tion (b) of this nnrtino t,,..,, ,... ~._._. _ b ..???. GVUl ~s oc ute Wilted States, except If procured by fraud, Misrellresentatloi tt,n ? 9.;3. Existing agency itu;to litigate, settle, connprolnisr. or ],!close clnlms thority to settle, compromse, orb close claims~r p mtLislhiSexisting July 19, 19GG1.30 Stat. 309. INDEX .CONSULT GENERAL INDEX POCKET'PART -ppr ved For Release 2002/0$/15 :, CIA-F:b084-00780800 00030003 6 Approved For Release 2002/08/15 : CIA-RDP84-0078OR002000030003-6 pules and Regulations ? 101.5 Conversion claims. The instructions contained in this chapter are directed primarily to the re- covery of money on, behalf of the Gov- ernment and the circumstances in which Government claims may be disposed of for less than the full amount claimed. Nothing contained In this chapter is in- tended, however, to deter an agency from demanding the return of specific prop- erty or from demanding, In the alter- native, either the return of property or the payment of its value. ? 101.6 Subdivision of claims not au- thorizcd. A debtor's liability arising from a par- ticular transaction or contract shall be considered as a single claim In dctermin- Ing whether the claim is one of less than $20,000, exclusive of Interest, for the pur- pose of compromise or termination of col- lection action. Sucha claim may not be subdivided to avoid the monetary ceiling established by the Federal Claims Col- lection Act of 1966, 80 Stat. 308. . ? 101.7 Required administrative pro. Aurxonrrr; The provisions of this Part 102 l~l issued under sec. 3, Federal Claims Collection Act of 1066, 80 Stat. 309. !. C ? 102.1 Aggressive agency collection action. The head of an agency or his designee shall take aggressive action, on a timely basis with effective followup, to collect all claims of the United States, for money or property arising out of the activities of, Approved*aorAReie 2QAsi0 1$~~ BW W Wc9F~~J20000300Q3-6 Tiliv 4-11LPfiIt T by the General Accounting Office as a part of Its audit of the agency's activities. Chriptor II-Federal Claims Collec- ??101.2 Ou,i.~irlns not n drfcnsr. tion Standards (General Account- The,.standards set forth in this chapter ing Office-Department of Justice) shall apply to the administrative han- dling of civil claims of the Federal Gov- JOINT REGULATIONS PRESCRIBING ernment for money or property but the STANDARDS FOR ADMINISTRA- failure of an agency to comply with any TIVE COLLECTION, COMPROMISE, provision of this chapter shall not be TERMINATION OF AGENCY Cnl- ' available as a defense to any debtor. LECTION ACTION, AND REFERRAL ? 101.3 Fraud, an0tritst, nod tax claims TO GENERAL ACCOUNTING OF- FICE, AND TO DEPARTMENT OF JUSTICE FOR LITIGATION, OF CIVIL CLAIMS. BY GOVERNMENT FOR MONEY OR PROPERTY Pursuant to section 3 of the Federal C1nllns Collection Act of 1066, 80 Stitt, 300, Title 4 of the Code of Federal Regu- lations Is amended to promulgate joint regulations prescribing standards for the administrative collection, compromise, termination of agency collection action, and the referral to the General Account- ing Office, and to the Department of Justice for litigation, of civil claims by the Government for money or property, by adding a new Chapter II as follows: Part 101 Scope of standards. 102 Standards for the administrative col- The stnnd:trds set forth in this chapter do not apply to the handling of any claim as to which there Is an indication of fraud, the presentation of a false claim, or misrepresentation on the part of the debtor or any other party having an interest in the claim, or to any claim' based In whole or in part on conduct In violation of the antitrust laws. Only the Department of Justice has authority to compromise or terminate collection ac- tion on such claims. However, matters submitted to the Department of Justice for consideration without compliance with the regulations in this chapter be- cause there is an Indication of fraud, the Nothing contained in this chapter is presentation of a false claim, or misrep- intended to require an agency to omit or resentation on the part of the debtor or foreclose administrative proceedings re- any other party having an interest in the ,..,c-,t >,.. ..- 11)1.11 Referral for litigation. As used in this chapter referral for litigation means referral to the Depart- ment of Justice for appropriate legal pro- ceedings, , unless the agency concerned has statutory authority for handling its own litigation. . av. o,.anuarus iur suspenuing or LerminaL- Ing collection action. 105 Referrals to GAO or for litigation. PART 101-SCOPE OF STANDARDS see. 101.1 Prescription of standards. 101.2 Omissions not a defense. 101.3 Fraud, natitrust, and tax claims 101.4 Compromise, waiver, or disposition under other statutes not precluded. 101.5 Conversion claims. 101.0 Subdivision of claims not authorized. 101.7 Rcqulr d administrative proceedings. 101.8 Referral for litigation. Anrrttonrrv: The provisions of this Part 101 Issued under sec. 3, Federal Claims Col- lection Act of 1066, 80 Stat. 300. ? 101.1 I'rescripiion of standards. The regulations in this chapter, issued jointly by the Comptroller General of the United States and the Attorney General of the United States under section 3 of' the Federal Claims Collection Act of PART .102-STANDARDS FOR THE ADMINISTRATIVE COLLECTION OF CLAIMS Sec. 102.1 Aggressive agency collection action., 102.2 Demand for payment. 102.3 Collection by offset. 102.4 Personal interview with debtor. 102.5. Contact with debtor's employing agency. 102.6 Suspension or revocation of license chapter if It is determined that action based upon the alleged fraud, false claim, or misrepresentation is not warranted. Tax claims, as to which differing exemp- tions, administrative consideration, en- forcement considerations, and statutes apply, are also excluded from the cover- age of this chapter. or eligibility. 102.7 Liquidation of collateral. 102.8 Collection in installments. 102.9 Exploration of compromise. ? 101.4 Compromise, waiver, or dispo- sition under other statutes not pre- cluded. 1 Nothing contained in this chapter is intended to preclude agency disposition of any claim under statutes other than the Federal Claims Collection Act of 1966, 80 Stat. 308, providing for the compro- mise, termination of collection action, or waiver in whole or In part of such a claim. See, e.g., "The Federal Medical Care Recovery Act," 76 Stat. 593, 42 U.S.C. 2651, et seq., and applicable regu- lations, 28 CFR 43.1, et seq. The stand- ards set forth in this chapter should be 1066, 80 Stat. 309, prescribe standards for ' followed in the disposition of civil claims the administrative collection, compro- by the Federal Government by compro- mise, termination of agency collection mise or termination of collection action action, and the referral to the General (other than by waiver pursuant to statu- Accounting, Office, and to the Depart- tory authority) under statutes other than Anent of Justice for litigation, of civil the Federal Claims Collection Act of claims by the Federal Government for 1966, 80 Stat. 308, to the extent such money or property. Regulations pro- scribed by the head of an agency pug- other statutes or authorized regulations slant to section 3 of the Federal Claims Issued pursuant thereto do not establish Collection Act of 1966 will be reviewed standards governing ouch matters. 102.10 Interest. . 102.11 Documentation of administrative collection action. 102.12 Additional administrative collection action. Approved For Release 2002/08/15 : CIA-RDP84-0078OR002000030003-6 ,ul' rri' i,'d t,,. WY in :,.,.gvl:u,rq 4::,IJ?r? N1 I,?,,it,:. 71 ?,'hri tcIt h the sill tn(ill : c.:rLlI In this Chap- ally inexcnsahir, prolnnr.vd or repeated tor. However, r contained in tills failure of ?a (1e)tor to pay such a claim chapter is 1nt.rn? a require the Gen- and the debtor will be so advised. A'ny cral Accounting or the Department agency making, guaranteeing, Insuring, of Justice to ilul>ilcc;.e collection actions acquiring, or participating in loans will previously, undertaken by any other, give serious consideration to suspending 1112.'-; Remand for payment.:. Appropriate written demands shall be made upon a debtor of the United States in terms which Inform the debtor of the conscgtic.nces of his failure to cooperate. Three written deulands, at 30-clay inter- vnlx, wIII normally be made unless a re- spouse to the first or second demand in- dicates that further demand would be futile or_ unless prompt suit or Attach- cate of authority to do business with the meat is required In anticipation of the, Federal Government has been revoked the jurisdiction or his or their removal or transfer of assets, or the running of the sintute of limitations. There should be no undue time lag in responding to any communication received from the debtor at, debtors. ? 10'2.3 Collection by offset. broker, borrower or other debtor from doing further business with it or engng- ing in li'rograms sponsored by It if such a debtor fails to pay its debts to the Gov- ernment within a reasonable time and the debtor will be so advised. The failure of any surety to honor its obligations in accordance with 0 U.S.C. 11 is to be re- Portod_to the Treasury Department at will be forwarded by that Department to all interested agencies, ? 102.7 Liquidation of collateral. Agencies holding security or collateral which may be liquidated and the pro- ceeds applied on debts due it through the exercise of a power of sale in the secu- Collections by offset will be under- rity instrument or a non-judicial fore- taken administratively on claims which ' closure should do so by such procedures are liquidated or certain in amount in if the debtor fails to pay his debt within a every instance in which this is feasible. reasonable time after demand, unless the Collections by offset from persons receiv- cost of disposing of.the collateral will be Ing pay or compensation from the Fed- disproportionate to its value or special oral Government shall be effected over a circumstances require judicial fore- period not greater than the period during closure. Collection from other sources, which such pay or compensation is to-be including liquidation of security or col- received. See 5 U.S.C. 5514. Collection lateral, is not a prerequisite to requiring by offset against a judgment obtained by payment by a surety or insurance, con- the debtor against the United. States cern unless such action Is expressly re-. shall be accomplished in accordance with quired by statute or contract. the Act of March 3, 1875, 18 Stat. 481, as amended, 31 U.S.C. 227. Appropriate use should be made of the cooperative efforts of other agencies in effecting collections by offset, including utilization of the enjoined to cooperate in this endeavor, ever, If the debtor is financially unable ? 102.4 Personal interview with debtor: to pay the indebtedness in one lump sum, payment may be accepted in regular in- Agencies will undertake personal inter- stallments, The size and frequency of views with their debtors when this is. , such installment payments should bear a feasible, having regard for the amounts real able relation to the size of the debt involved and the proximity of agency and the debtor's ability to pay. If pos- representatives to such debtors. . sible the installment payments should be ? 102.5 Contact with debtor's employing agency. When a debtor is employed by the Fed- eral Government or is a member of the military establishment or the Coast Guard, and collection by offset cannot be accomplished in accordance with 5 U.S.C. 5514, the employing agency will be con- tacted for the purpose of arranging with the debtor for payment of the indebted- VSA-70a, from a debtor when the total Hess b all tm t th i i y o en or o erw se n accord- amount of the deferred installments will ance with section 206 of Executive Order exceed $750. Such notes may be sought. 11222 of May 8, 1965, 3 CFR, pp. 130, 131 when an unsecured obligation of a lesser (1965 Supp.) (30P.R.6469). amount Is Involved. Security for de- 102.0 Suspension or revocation of Ii. ferred payments, other than a confess- eenso or cligihility. judgment note; may be accepted ,in ap- Agencies seeking the collection of pl?oprlato cases. An agency may accept statutory penalties, forfeitures, or debts installment payments notwithstanding provided for as an enforcement aid or for the refusal of a debtor to execute a con- compelling compliance will give serious Tess-judgment note or to give other secu- consideration to the suspension or revo- Pity, at the agency's option. 1 I U2.9 I. ,?.n',f ,?orr.pr?nr ;...,. Agencies will attempt to effect compro- mises (preferably during the course of personal Interviews), of claims of $20,000 or less exclusive of Interest, in accord- ance with the standards set forth in Part 103 of this chapter in all cases in which it can be ascertained that the debtor's financial ability will not permit payment of the claim in full, or In which the litiga- tive risks or the costs of litigation dictate such action. ? 102.10 Interest. . , In cases in which prejudgment interest is not mandated by statute, contract or regulation, the agency may forego the collection of prejudgment interest at an inducement to voluntary payment. In such cases demand letters should Inform the debtor that prejudgment interest will be collected if suit becomes necessary. When a debt is paid in installments and interest is collected, the installment payments will first be applied to the payment of nccrund Interest and then to prhtclpal, in accordance with the so- called "U.S. Rule", unless a different rule is prescribed by statute, contract or regulation, Prejudgment Interest should not be demanded or collected on civil penalty and forfeiture claims unless the statute under which the claim arises authorizes the collection of such interest. See Rodgers v. United States, 332 U.S. 371. ? 102.11 Documentation of grim ?? rrn. live collection action. All administrative collection action should be documehted and the bases for compromise, or for termination or sus- pension of collection action, should be :set out in detail. Such documentation should be retained in the appropriate 102.12 'Additional administrative col- lection action. Nothing contained in this chapter, is intended to preclude the utilization of any other administrative remedy which may be available. PART 103-STANDARDS FOR THE COMPROMISE OF CLAIMS Sec. 103.1 103.2 103.3 103.4 103.5 103.6 103.7 103.8 103.9 Scope and application. Inability to, pay. Litlgative probabilities. Cost of collecting claim. Enforcement policy. Joint and several liability. Settlement for a combination of reasons. Further review of compromise offers. AUTHORITY: The provisions of this Part 103 Issued under see. 3, Federal Claims Col- lection Act of 1060, 80 Stat. 300. ? 103.1 ' Scope and application. The standards set forth In this part apply to the compromise of claims, pur- suant to section 3(b) of the Federal Claims Collection Act of 1966, 80 Stat. 309, which do not exceed $20,000 exclu- sive of interest. The head of an agency or his designee may exercise such com- Approved For eIeaseV1803~~ /1 ?1: G~t~t~ p 4?8 7~8b1'tbb2000030003-6 08 Claims, with Interest in accordance with section 102.10 of this chapter, should be collected in full in one lump sufficient In size and frequency to liqui- date the Government's claim in not more than 3 years. Installment payments of less than $10 per month should be ac- cepted in only the most unusual circum- stances: An agency holding an unse- cured,claim for administrative collection should attempt to obtain an exe- cuted confess-judgment note, compara. Approved For Release 2002/08/15 : CIA-RDP84-0078OR002000030003-6 RULES ANND REGULATIONS promise :' i?;. with respect to claims debtors by i c;:n: t to balance sheets and .? 703.7 Scnlcnrcnt for n combination of for nnonc:: ;.rope?rLy arising out of the such additional data. as seems required. rea c ns, activities o; :.r, n;:cncy prior to the refcr- rat of such c;,:hrs to the General Ac- ? 103.3 1''t';;ntn?cprobnlnl,tics. A claim may be compromised for one counting 0111X.- or to the Department of A claim may be compromised pursuant 'or for more than one of the reasons au- Justice for litigation. The Comptroller to this part if there is a real doubt con- thorized in this part. General or his designee may exercise corning the Government's ability to prove ? 103.8 Further review of comprorui.e such compromise authority with respect Its case in court for the full amount offers. to claims referred to the General Ac- claimed either because of the legal is- If an agency holds. a debtor's firm count.in;: Office prior to their further sues involved or a bon n di t t r a c 1 out of an exception made by the General legal question involved, the probabili- 6 ou d be accepted, it may refer the.offer, Accountinr Office in the account of an. tics with respect to full or partial recov- the supporting data, and particulars con- Ac- or claim to to the the General t of accountable officer, Including a claim cry of a judgment having due regard to counting the ngnit'st the payee. prior to its referral the availability of witnesses and other Justice. . The The General Accounting. Of- by that Office for litigation. evldentlary support for the Government ng, flee or the Department of Justice may ay ? 103.2 L,btlity to pay. claim, and rela,.ed pragmaf.ic: considers act upon such an offer or return it to tiros T~rnr.n,?Hn..nt .. ............ ....._..,~ w_ ._ .911- a as o written offer of compromise which is referral for litigation. Only the Comp- the facts. The amount accepted in con- substantial in amount and the agency troller General or liIA dc'Fiignee may effect promiso iii such noses should fairly re- is uncertain its to whether the Offer the compromise of a claim that arises flectithe probability of provalling on the h may be used for this purpose, Similar which will be required from other debt- be of. assistance in locating missing ors jointly and peverally liable on the debtors: Telephone directories; city di- data may be obtained from corporate claim. . , rectories; postmasters; drivers' license m ized thereon. The following sources may s sue binding in determining the amount as Department of Justice form D.T r s l Government's ability to enforce coffee- a es a ishcd as an aid to enforce- app Y to the suspension or termination iron. A compromise effected under this ment and to compel compliance may be of collection action pursuant to section compromised' pursuant to this part if 3(b) of the Federal Claims Collection Act section should be for an amount which the agency's enforcement policy in terms of 1966, 80 Stat. 309, on claims which do bears a reasonable relation to the of deterrence and securing compliance, not exceed $20,000 exclusive of interest. amount which can be recovered by en- both present and future, will be ade- The head of an agency or his designee forced collection procedures, having re- quately served by acceptance of the sum may suspend or terminate collection ac- gard for the exemptions available to the to be agreed upon. Mere-accidental or . tion under this part with respect to debtor and the time which collection technical violations may be dealt with claims for money or property arising out will take. Compromises payable In in- 'less severely than willful and substantial of activities of his agency prior to the stallmcnts are to be discouraged. How-. violations. referral of such claims to the General ever, if payment of -a compromise by Accounting Office or to the Department installments is necessary, an agreement ? 103.6 Jointpnd several lini,iliiy. of Justice for litigation. The Comptrol- for the reinstatement of the prior In- ler General or his designee may exercise clcbtcdness less sums paid thereon and When two or more debtors are jointly such authority with respect to claims re- acceleration of the balance due upon and severally liable collection action will ferred to the General Accounting Office default in the payment of any install- not be withheld against one such debtor meat should be obtained, together with until the other or others pay their pro- prior to their further referral for Ilti- security in the manner set forth in portionate share. The agency should gation. ? 102.8 of this chapter, in every case in not attempt to allocate the burden of ? 104.2 Suspension of collection activity. which this is possible. If the agency's paying such claims as between the debt- Collection action may be suspended file's do not contain reasonably up-to- ors but should proceed to liquidate the temporarily on a claim when the debtor date credit Information as a basis for indebtedness as quickly as possible, cannot be located after diligent effort and assessing a compromise proposal such Care should be taken that compromise there is reason to believe that future col- information may be obtained from the with one such debtor does not release lection action may be sufficiently produc- individual debtor by obtaining a state- the agency's claim against the remain- tive to justify periodic review and action ment executed under penalty of perjury . Inc debtors. The amount of a compro- on the claim having consideration for its showing the debtor's assets and liabili- mise with one such debtor shall not be size and the amount which may be zeal; h considered a precedent or as mornll ties, income and expense For debtor under State and Federal law in will not carry great weight insthe sett "r Avs7roarrr: The provislons of this Part 104 le- Issued determining the Government's ability to ment of large claims. tion Act cod of er 10666ec. 3. tat. 3l Claims Collec- enforce collection. Uncertainty as to tion , 8d Sat 300. the?price which collateral or other prop- ? 103.5 1:nforct'mcnt policy. ? 104.1 Scope and application. erty will bring at forced sale may prop- Statutory penalties, forfeitures, or The standards set forth in this part erly be considered In determining the bt t b I sse s ave een con- may reflect an appropriate discount for LECTION ACTION ccaled or Improperly transferred by the the administrative and liti ;alive costs debtor; the availability of assets or in- of collection hiving regard for the time. sec. come which may be realized upon by which It