Breaking A Bill-Oriented Payment Arrangement
If a customer neglects to pay a bill, an overdue process is created. If the bill contains charges from a payment arrangement, you'll want to "break" the payment arrangement. By "break", we mean cancel the arrangement and reinstate the debt under the originating bills. To do this, you must configure the
cut process template used to cut the PA SA to contain a cut event that breaks the payment arrangement.
Note:
Processing is redirected to another algorithm. The base-package cut event activation algorithm that breaks a payment arrangement simply redirects the call to the Bill-Based Payment Arrangement algorithm plugged in on the account's
Collection Class Overdue Rules. The reason for this redirection is that users can manually break a payment arrangement (using
Payment Arrangement - Bill Oriented). When they do this, we want to invoke the same logic as when a cut event activation algorithm breaks a payment arrangement.
The base-package Collection Class Overdue Rule - Bill-Based Payment Arrangement algorithm does the following:
• Creates "cancel adjustments" for all unpaid financial transactions associated with the payment arrangement (e.g., billed, but not paid installments).
• Cancels ALL adjustments that were used to transfer the debt to the payment arrangement. When these are cancelled, the original bills will become unpaid (and the debt will be rather old by this point).
• Syncs up current balance with payoff balance on the PA SA.
• Makes the PA SA pending stop and expires it (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 bills that contributed debt to it (the oldest bills are paid off first). This relief will occur via transfer adjustments from the PA SA to the original SAs.
• Note, if there is a debit left (e.g., because LPC were issued or some other type of adjustment was created by an operator), an error is issued as we don't handle new debit on a payment arrangement.
• Inserts a characteristic on the PA SA to indicate that it has been broken (you might want to use this to cause more strict overdue rules to be applied to accounts with broken payment arrangements).
• Marks the account so it will be reviewed by the
Overdue Monitor the next time it runs.
Note:
The PA SA must final bill before it closes. It's important to note that the PA SA will only close after the PA SA is final billed. This is OK as it won't have any money left on it.
When the Overdue Monitor next runs, it will analyze the account's reinstated bills. We recommend setting up a Collection Class Overdue Rule - Overdue Monitor Rule algorithm that has more stringent rules if the account has a broken payment arrangement within the last X days. The base-package algorithm (C1-CB-CR-RAT) supports this type of processing.
Note:
Log entry. The base-package overdue event activation algorithm that breaks a payment arrangement SA inserts a row into the overdue process's
log.
Parent topic