Default Bankruptcy Process
A major function of LoanPro software is to make common company processes as streamlined and effective as possible, to save users on time and manpower. This article will cover how this is generally accomplished with the Bankruptcy process.
The flow chart below outlines all the changes and processes implemented by LoanPro directed by the agent user's inputs in the wizard. The agent user's role is outlined in this article.
Default Bankruptcy Process
The Default Bankruptcy Process is intended to help manage bankruptcy claims and filings with ease.
Starting the Process
In the event that bankruptcy has been filed on an account, enter the loan account in LoanPro and navigate to the 'Wizards Tab'. Select the 'Category' drop-down and click 'Bankruptcy Wizards'. This will display only the bankruptcy wizards.
In order for the Bankruptcy Wizards to be available, the loan must be in an 'Open', 'Closed', or 'Application' status. If the loan meets these criteria, click OPEN and START on the 'Bankruptcy Notification Wizard' to begin the process.
Check the 'Bankruptcy Notification Received' checklist item, then click SAVE and NEXT.
On this page select a necessary Action and Result, then document any additional relevant information regarding the bankruptcy notification in the note. Once you have completed and saved the note, click NEXT to exit the wizard.
Manual Bankruptcy Removal
If it is determined that the account needs to be removed from the Bankruptcy Process, navigate to the 'Wizards' tab, select 'Bankruptcy Wizards' from the drop-down menu, and begin the 'Bankruptcy Manual Removal Wizard'.
Check the 'Remove Bankruptcy' checklist item, click SAVE and NEXT to proceed.
On this page, select an appropriate action and result. Then document any necessary information regarding the canceled bankruptcy in a note. Save the note and click NEXT to exit the wizard. Note: Only enter and complete this wizard if you want the loan account to be removed from the bankruptcy process and placed back in a repaying status.
Continuing the Bankruptcy Process
To continue the Bankruptcy Process, navigate again to the Wizards tab, and click OPEN and START on the 'Bankruptcy Confirmation Wizard'.
Click ADD NEW to add a new bankruptcy Filing.
Fill out all the required and new information regarding the bankruptcy. The required information is marked with an asterisk. Once the necessary fields have been populated, click SAVE. The bankruptcy filing will then need to be activated.
Click on to show the bankruptcy filings on the account.
Once the filing is showing, click on the to set the filing as active. Then click NEXT to continue.
On this page, check the appropriate bankruptcy chapter in regards to the loan account. Click SAVE and NEXT.
Check the 'Bankruptcy Filing Confirmed' checklist item, then click SAVE and NEXT.
On this page, select an appropriate action and result. Then document any necessary information regarding the bankruptcy filing in a note. Save the note and click NEXT to exit the wizard.
Chapter 11, 12, or 13 Modification
If the filed bankruptcy is in chapter 11, 12, or 13, the following wizard allows you to modify the loan according to the bankruptcy circumstances.
Navigate to the 'Wizards' tab and click OPEN and START on the 'Bankruptcy Chapter 11, 12 or 13 Wizard'.
Follow the instructions provided to modify the loan account according to the bankruptcy plan. Make sure to the new changes and then the loan. Click NEXT to continue.
On this page, select an appropriate action and result. Then document any necessary information regarding the loan modification in a note. Save the note and click NEXT to exit the wizard.
Discharge or Dismissal of Bankruptcy Filing
If you wish to discharge/dismiss the prior bankruptcy filing, navigate to the 'Wizards' tab and begin the 'Bankruptcy Discharge/Dismissal Wizard'.
Select either the Bankruptcy Discharged or Bankruptcy Dismissed checkbox. If the bankruptcy filing and plan is completed successfully, you will select 'Bankruptcy Discharged'. This means that all the debt is satisfied and the creditors will not pursue additional collection actions. If the bankruptcy filing and plan is dismissed, the legal effect is that the bankruptcy is deemed void meaning creditors can initiate or continue legal collection practices. If this is the case, select 'Bankruptcy Dismissed'.
On this page, follow the instructions to upload any applicable loan documents regarding the bankruptcy filing and plan. Note: These are saved as loan documents which are linked to the loan account, not the customer.
On this page, select an appropriate action and result. Then document any necessary information regarding the bankruptcy discharge/dismissal in a note. Save the note and click NEXT to exit the wizard.
Customer Refiles for Bankruptcy
If a customer's bankruptcy filing has been dismissed and they refile for bankruptcy, navigate to the 'Wizards' tab and enter the 'Bankruptcy Refiling Wizard'.
Check the 'Bankruptcy Refiling' checklist item and click SAVE. Note: By checking and saving this box, the bankruptcy will be "reset" on this loan meaning you can start the bankruptcy process from the beginning. Click NEXT to continue the wizard.
Upload any necessary documents pertaining to the bankruptcy filing, the click NEXT.
Check the 'Bankruptcy Notification Received' checklist item to restart the bankruptcy process for the new filing. Click SAVE and NEXT to complete the wizard.