This chapter explains how to manage delinquencies including later-stage collections activities such as litigation, write-offs, repossessions, and bankruptcies.
This chapter covers the following topics:
As a delinquency moves through the collections life cycle, its status may change or escalate over time. In the later stages of the collections life cycle, you may need to initiate other actions. Complicated delinquencies can involve changing credit or payment terms, bringing suit to get payment, repossessing and reselling assets to cure delinquencies, or customer bankruptcy.
Although Oracle Advanced Collections does not support all of the complex logistical, legal, or financial details of these situations, collectors can use the Lifecycle tab to manage key, high level dates and actions that help a collections organization delinquencies throughout the collections life cycle. Managers and collections specialists can use the Lifecycle tab to manage later-stage delinquency events.
The Lifecycle tab provides a view of all of a customer's delinquencies. Complicated delinquencies can involve placing customers on credit or service hold (used only with Oracle Lease and Finance Management), bringing suit to get payment, repossessing and reselling assets to cure delinquencies, writing off assets, or customer bankruptcy. The Lifecycle tab, in conjunction with the Delinquencies pages used by collections specialists and managers, support these later-stage delinquency processes.
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As the customer status changes it is critical for the collections team (manager, agent, and specialists) to be able to capture, view and update information about each status in order to track the delinquency and collect monies owed. It is also important for the user to be able to see summary and detailed information on past statuses for the selected delinquency or account in order to effectively manage the customer's current delinquency.
Use this procedure to view and update delinquency information.
Using the Collections Agent responsibility, in the Collections window, select the Lifecycle tab.
Open delinquencies for the selected view appear.
If you want closed delinquencies as well as open delinquencies, then select Display All.
The table lists open and closed delinquencies.
Select a delinquency from the table to view details about the delinquency.
The details change depending upon the status of the delinquency.
For information on updating delinquency information and escalating a delinquency, see: Updating a Delinquency.
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Viewing Collections Lifecycle Data
As the customer status changes, it is critical for the collections team (manager, agent, and collections specialists) to be able to capture, view and update information about each status in order to track the delinquency and collect monies owed. Collections agents can enter a change in status on the Lifecycle tab for managers and collections specialist to manage.
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Companies must respond expediently to a delinquent customer's claim that they are planning or actually in bankruptcy. Companies must quickly execute strategies to get money from debtors, establish themselves as valid creditors with bankrupt debtors, or attempt to repossess and re-market assets to reduce their own financial exposure and bad debt.
A collector may be told by a debtor that they cannot pay because they are out of money and planning to declare bankruptcy. The collector should then gather initial information about the debtor's claim, attorneys involved, filings made and other legal information for a legal specialist.
When a customer files for bankruptcy, manual or automated processes are also set in motion to prevent any more collections calls to the customer, turn off invoicing, and overall place the customer and all related accounts into the bankruptcy status.
After the bankruptcy process is complete, you can begin additional actions including subsequent collections, write-off, and payment terms.
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If you use Oracle Lease and Finance Management, you can write off individual contracts in a case. Write-offs occur at the contract, account, or delinquency level. For non-leasing customers, use adjustments to write off individual delinquencies or individual items on a Receivables invoice. See: Adjusting Invoices.
See: Updating a Delinquency to know more about the write-off process.
To use Service Hold Request, set the IEX: Service Hold of Delinquencies profile option to Yes.
When a delinquent customer refuses, or is markedly slow, to resolve a delinquency, some collections organizations consider bringing suit to obtain payment on some or all of the debt.
The litigation process involves legal processes to obtain a judgment against a customer. This is done usually through a corporate lawyer or legal representative working for the collections organization. However, the collector is often the person who determines that further collections efforts for a specific delinquency will be fruitless and escalates the delinquency to litigation status.
The Credit Hold Request and Service Hold Request are only available if you are using Oracle Lease and Finance Management and the IEX: Credit Hold of Delinquencies and IEX: Service Hold of Delinquencies profile options are set to Yes.
Equipment or other assets owned or leased by a customer can be repossessed as part of the effort to collect on debt. This status may exist toward the end of a collections cycle if the customer is unable or unwilling to pay and all other options have been explored. Rather than lose the entire value of the asset, the collections organization repossesses the asset. Asset remarketing may then take place.
If you use Oracle Lease and Finance Management, you can review cases and track actual or budgeted costs for collecting on a case in Oracle Advanced Collections.
A case is defined as a group of contracts for a customer sharing the same bill-to address, private label, and other Leasing Contract parameters.