Installment, Payoff and Current Amounts

When you set up a payment arrangement service agreement (PA SA), you transfer delinquent debt to the PA SA using transfer adjustments. After moneys are transferred, the system sets the PA SA's current balance to zero. At this point, neither the original service agreements nor the PA SA have delinquent debt. If the customer neglects to pay their payment arrangement, the PA SA will fall into arrears and a collection process will ensue. If the customer neglects to pay their previously delinquent SAs, they will again fall into arrears and a collection process will ensue.

PA SAs start their life with a non-zero payoff balance (i.e., they have debt when first started). This debt is transferred from the normal service agreement(s) whose outstanding debt necessitated the creation of the PA SA.

The installment amount that the customer is billed is determined by the number of installments used to payoff the debt. For example, if the customer owes $500 on their electric and water service agreements and they want to pay this off in 10 installments, you'd set up the installment amount to be $50. The installment amount is saved on the PA SA's recurring charge amount. If the customer again falls into arrears on their normal service agreements, you can transfer additional delinquent debt to the PA SA. You can also change the installment amount as needed.

A PA SA's payoff balance typically differs from its current balance. The payoff balance is the amount of debt remaining to be paid off under the terms of the payment arrangement. The current balance is the installment amount that has been billed but not paid. For example, a customer who is paying off $500 with 10 installments of $50 would have an initial payoff balance of $500 and a current balance of $0. After the first bill, the PA SA would still have a payoff balance of $500, but its current balance would be $50. When the customer pays, the PA SA's payoff balance would fall to $450 and its current balance would return to $0.

The following table contains a financial example of a customer who sets up a payment arrangement to payoff $1,000 of debt in $10 installments.

When the customer pays off the payment arrangement debt, the system automatically closes the PA SA after it final bills (assuming the PA SA's SA type references a bill segment type that has a bill segment creation algorithm of Recurring Charge With Auto Stop ).