How Promise To Pay Affect The ADM
As described under A Promise To Pay Insulates Overdue Debt, a promise to pay's scheduled payments insulate an account's debt from the ADM. This section describes how this is accomplished.
Before the ADM (and ADM2) subjects an account's debt to the collection criteria, it calls the debt's debt class's Override Arrears Algorithm (this is an optional plug-in spot on Debt Class). This algorithm is passed the debt class's aged debt and manipulates it as follows:
- First, a list of all past, present and future scheduled payments
associated with the account and debt class's active promise to pay is constructed.
- If multiple payors are encountered (because the customer has multiple promise to pay and these have different payors), a separate list of scheduled payments is maintained for each payor.
- Next, for each payor, retrieve the total amount of frozen, non-cancelled payment segments made on behalf
of the promise to pay's account and debt class.
- Select all frozen, non-cancelled payment segments associated with the promise to pay's account and debt class whose pay date is >= promise to pay's start date and the pay segment's event has at least one tendering account associated with the promise to pay's payor.
- Next, logically reduce / remove past and current scheduled payments (starting with the earliest scheduled payment) until the payor's payment amount is exhausted (or there are no more historical / current scheduled payments). Future scheduled payments cannot be remove / reduced.
- Finally, reduce the passed in aged debt with any unpaid scheduled payments.
| Date | Event | Contract's Arrears | Account's Balances | Scheduled Payments |
|---|---|---|---|---|
| Prior to creation of the PP 1/18/2000 |
$1,000 - 90 days old $1,600 - 60 days old $1,900 - 30 days old |
Current: $4,500 Payoff: $4,500 |
||
| 1/18/2000 | Promise to pay created. The $4,500 in future scheduled payments offsets the existing $4,500 of aged debt. |
$1,000 - 90 days old $1,600 - 60 days old $1,900 - 30 days old De facto ADM debt: $0 |
Current: $4,500 Payoff: $4,500 |
1/20/2001 $1,500 2/01/2001 $1,500 2/07/2001 $1,500 |
| 1/20/2001 | The customer pays $1,500. There exists $3,000 of future scheduled payments that offset the arrears |
$1,100 - 62 days old $1,900 - 32 days old De facto ADM debt: $0 |
Current: $3,000 Payoff: $3,000 |
1/20/2001 $1,500 "Paid" 2/01/2001 $1,500 Future 2/07/2001 $1,500 Future |
| 1/20/2001 | ADM runs. The $3000 in future scheduled payments offsets the Current Balance of $3000, so CC events not created. |
$1,100 - 62 days old $1,900 - 32 days old De facto ADM debt: $0 |
Current: $3,000 Payoff: $3,000 |
1/20/2001 $1,500 "Paid" 2/01/2001 $1,500 Future 2/07/2001 $1,500 Future |
| 1/24/2001 | A new bill is created for $400 |
$1,100 - 62 days old $1,900 - 32 days old $400 - 1 day old De facto ADM debt: $400 - 1 day old |
Current: $3,400 Payoff: $3,400 |
1/20/2001 $1,500 "Paid" 2/01/2001 $1,500 Future 2/07/2001 $1,500 Future |
| 2/2/2001 | Promise To Pay Monitor runs. PP marked as Broken because the 2/1/2001 scheduled payment has not been paid (assuming no grace period on the promise to pay's payment method) |
$1,100 - 74 days old $1,900 - 44 days old $400 - 8 days old |
Current: $3,400 Payoff: $3,400 |
1/20/2001 $1,500 "Paid" 2/01/2001 $1,500 "Late" 2/07/2001 $1,500 Future |
| 2/2/2001 | ADM runs. There are no active promise to pay and therefore there is nothing to insulate the customer's debt. Therefore the aged debt will be subjected to the collection criteria and an appropriate collection process will be created. |
$1,100 - 74 days old $1,900 - 44 days old $400 - 8 days old De facto ADM debt is the same as above (i.e., rather old) |
Current: $3,400 Payoff: $3,400 |
Promise to pay is broken and therefore its scheduled payments cannot be used. |