Defer arrears on a finance agreement

Defer arrears on a finance agreement

Charging of arrears can be “deferred” on a finance agreement.

Setting the defer arrears days on a finance agreement will reduce the arrears days on the account by the defer arrears days, up until the expiry of the defer agreement or until the agreement is broken.

 

Example 1: The defer arrears days is set to 5 days and the expiry date is 20 Jan 2017. Today is the 8 Jan 2017 and the account is already 3 days in arrears.

9 Jan –Account is treated as 1 day in arrears. Arrears letter and fees etc sent are based on being (4 – 5) i.e. -1 days in arrears

10 Jan – Account is treated as 2 days in arrears. Arrears letter and fees etc sent are based on being (5 – 5) i.e. 0 days in arrears

11 Jan – Account is treated as 3 days in arrears. Arrears letter and fees etc sent are based on being (6 – 5) i.e. 1 days in arrears

12 Jan – Account is treated as 4 days in arrears. Arrears letter and fees etc sent are based on being (7 – 5) i.e. 2 days in arrears

13 Jan – Account is treated as 5 days in arrears. Arrears letter and fees etc sent are based on being (8 – 5) i.e. 3 days in arrears

20 Jan - the expiry has been reached, account is 15 (3 + 11 + today) days in arrears.


A borrower has not paid and defer arrears agreement is expired. Arrears letter and fees etc sent are based on being 15 days in arrears.

 


Example 2: The defer arrears days is set to 5 days and the expiry date is 20 Jan 2017. Today is the 8 Jan 2017 and the account is already 3 days in arrears.

9 Jan –Account is treated as 1 day in arrears. Arrears letter and fees etc sent are based on being (4 – 5) i.e. -1 days in arrears

10 Jan – Account is treated as 2 days in arrears. Arrears letter and fees etc sent are based on being (5 – 5) i.e. 0 days in arrears

11 Jan – Account is treated as 3 days in arrears. Arrears letter and fees etc sent are based on being (6 – 5) i.e. 1 days in arrears

12 Jan – Borrower pays arrears in full. Account is zero days in arrears

…

20 Jan - The defer arrears agreement is expired

 

Only one active defer arrears can exist at any given point in time against a finance agreement.

An arrears defer log exists against the finance agreement so history of defer agreements can been seen. A menu item also exist under finance agreements to remove defer arrears.


1. Login to the asset class where the finance agreement resides -> home pages->  Borrowing




2.  Select Finance Agreement 



3. Use the filters to select the finance agreement that you need to make changes


4. Once you have selected the finance agreement, go to actions menu-> Arrears-> Defer Arrears

5. The defer arrears page will be displayed where you will be able to indicate how long you wish to defer the arrears for



Number of Days:                              The number of days arrears will be deferred by
Agreement Expires After:                Once the date is reached the deferment will expire and arrears calculated as per normal, excluding the deferment.           

A deferment can be removed prior to the expiry date by using the "Remove Defer Arrears" option on a finance agreement


    • Related Articles

    • Change arrears collector against a finance agreement

      The arrears collector for a finance agreement can be manually changed or over ridden  1. To change the arrears collector on Finance agreement which is on Arrears,  navigate to Home pages -> Borrowing -> Finance Agreements  2. Use the filters to find ...

    • Add arrears notes to a finance agreement

      A note that is relevant to arrears can be added against a finance agreement and at the same time the arrears status can be overridden or manually changed.  1. To add an arrears note to a Finance agreement Navigate to  Home pages -> Borrowing -> ...

    • Override an arrears status against a finance agreement

      The arrears status for a finance agreement can be manually changed or over ridden. It is important to note that arrears letters will only be sent out and the associated arrears fees charged if the finance agreement has an arrears status that is equal ...

    • Override an arrears pool against a finance agreement

      The arrears pool for a finance agreement can be manually changed / over ridden for a period of time. 1. To do that, login to the asset class where the finance agreement resides -> home pages->  Borrowing 2.  Select Finance Agreement  3. Use the ...

    • Finance agreement transaction types

      Transaction Type Description Balance Fee Balance  Arrears Balance Overpay Balance ArrearsAdjustment Any transaction that results in an adjustment to the existing arrears value. Increase ArrearsAdjustmentOnInterest Any interest transaction that ...