Monitoring Payment Arrangements

The PA SA should belong to its own debt class (let's call it Payment Arrangement Debt) so that you can have stricter collection criteria for payment arrangement debt (as compared to normal SAs). Because there will be a new debt class, there will be a unique collection class control (CCC) for payment arrangements. This CCC will have debt criteria associated with payment arrangement debt. If these criteria are violated, we will kick off a collection process that should have 1 collection event - Start Severance.

The severance process template for PA SAs will have 1 severance event that calls the Break Payment Arrangement Event algorithm. This algorithm does the following:

• Cancels ALL adjustments that were used to transfer the debt to the payment arrangement (identified by the XFER adjustment type on the PA SA's SA type). When these are cancelled, the original arrearage will be reinstated under the original SAs - this debt should be rather old by this point.
• Syncs up current balance with payoff balance on the PA SA.
• Makes the PA SA pending stop (SA activation will stop the SA when it next runs).
• If there is a credit left on the PA SA (because payments were made against the arrangement), the credit will be distributed amongst the account's debt using the standard distribution algorithm. Because the payment arrangement debt that was reinstated should be rather old, it should get relieved first. This relief will occur via transfer adjustments from the PA SA to the original SAs.
• If there is a debit left (e.g., because LPC were issued or some other type of adjustment was created by an operator), the debt will be transferred back to one of the SAs from which the arrangement was originally created.
• Inserts a characteristic under the PA SA to indicate that it has been broken (we need this for the account debt monitor (ADM) a few steps down).
• Inserts a row on the account debt monitor trigger. This trigger will cause the account to be reviewed by the ADM the next time it runs.

When the ADM next runs, it will analyze the account's reinstated debt. We recommend creating a new override collection criteria for the normal debt class that will return a value of true if the account has a closed payment arrangement that has been broken in the last X days (where X is a parameter of the override collection criteria's algorithm). If this algorithm returns a true, kick off a unique collection process template (that has nasty events). A sample algorithm of this type is supplied in the base package - COLL COND PA.

To complete this discussion, we have to worry about the situation when the final bill of a payment arrangement goes unpaid. In this situation, the payment arrangement is stopped and will therefore not be processed by the ADM. In this case, the write off monitor will process the PA SA after its final bill's due date and a write-off process will start. This write off process will have a single event that calls the Break Payment Arrangement algorithm (described above). After the FT's are issued in this event, the SA will close (because it's been final billed and its balance will go to zero).