1. Lease Servicing User Guide
  2. Appendix : Transaction Parameters
  3. Monetary Transactions
  4. Account Settlement Transaction

A.1.25 Account Settlement Transaction

A delinquent account can be settled when the lender agrees for a specific settlement amount with the borrower. Here the settlement amount is the net amount agreed for settlement between both the parties. If the borrower makes that payment within the Good through date, lender would consider that corresponding account is paid off / closed even if actual payment is less than the actual outstanding balance.

Note that, system does not allow to post account settlement transaction on Charged Off accounts. Similarly when Account Settlement Transaction is in force, system does not allow to charge-off the account.

Table A-47 To post an account settlement transaction

Transaction Parameters
ACCOUNT SETTLEMENT TXN DATE
EFFECTIVE DATE
GOOD THROUGH DATE
AGREED SETTLEMENT AMOUNT
COMMENT

Here, the transaction date can be back dated but the effective Date for the settlement need to be the current date or a future date.

On posting the transaction successfully, the new account condition Account Under Settlement is updated with end date as Good Through Date.
  • On Good Through Date if the settlement amount is partially or not honoured, system automatically closes the Account Under Settlement condition posted on the account and also remove the settlement details posted on the account.
  • In case the entire settlement amount is received on or before the Good Through Date, on executing the Account Settlement Processing batch on that day, system closes the Account Under Settlement condition. The Settlement Information in Customer Service Summary screen and Account Details screen is retained to indicate the last settlement information that lead to the PAIDOFF status of the account.
  • Paid Off transaction is automatically posted so that account balance will be updated as zero.
  • System ignores the Write-off Tolerance amount to post Paid-Off transaction and outstanding balances will be waived.
The Settlement Information is updated in following screens:
  • Customer Service > Summary > Account Details > Settlement Information
  • Customer Service > Account Details

If required, this settlement monetary transaction can also be reversed from the Payment Maintenance screen by clicking the Reverse button.

Parent topic: Monetary Transactions