Best Practice for Handling Repossessions

1. Using the Collections Tracker type (XX) and a Repossessions Memo type (RP): enter date, why, repossession company used, and fee
2. Using Tool # 30: Member Account Adjustment (Coded), post the Repossession Fee to the account
   • If you do not have a configured Repossession Fee, you can configure one using Tool # 534: Misc. Posting Codes Configuration<Account Adjustments<Add New Code
3. Using Tool # 20: Update Account Information, place a Freeze Code 3 on the account so deposits and withdrawals cannot be posted to the account
4. Using Tool # 20: Update Account Information, select the Credit Reporting Information tab and update the Credit Bureau Status Code (This is generally a Status Code ‘96’ Merchandise was repossessed by credit grantor; there may be a balance due)
5. Using Tool # 7: Phone Operator/Call Center Tools, enter a comment regarding the repossession (You may even wish to Nickname the account “Repossession by using Tool # 881: Update Account Nicknames)

If you use a Collateral in Process (CIP) of Repossession GL:

As a rule, auditors require a Write Down prior to movement into a CIP GL.

In this case, you will post a Full Account Adjustment using Tool # 492: Member Account Adjustment (Full) to Write Down to your 719.XX GL.

• The dollar amount left on the account can then be moved (in its entirety) to your CIP GL

When you have sold or received money for this collateral, you will use Tool # 492: Member Account Adjustment (Full) to post an account adjustment to move the entire balance you transferred after the Write Down, back to the account.

Once it has been moved back to the account, you can post your payment.

If there is a deficiency left on the account, there are two options to resolve the balance:

1. You may turn it into an unsecured loan for payoff and code it as a TDR
2. You can Write-Off this balance as usual to the appropriate Write-Off or Charge-Off GL

For a PDF document of the information above click here.