Reverse Charge Off Workflow Step

Accounts that have been mistakenly charged off may be taken out of Recovery and returned to delinquent status using the Reverse Charge Off workflow step. Upon successful completion of the step, all related charge off statuses, flags, fields, and transactions are cleared from the account. The account also appears in Collection Queues with a classification of "Delinquency" instead of "Charge Off."

Once the Reverse Charge Off workflow step executes on an account and all of the related charge off information has been cleared, it cannot be undone; therefore, it is recommended that this workflow step is only given to supervisors.

This topic consists of the following information:

Workflow Step Properties
Charge Off Reversal Process

Workflow Step Properties

The Charge Off Reversal workflow step consists of one field titled Reasons for reversing Charge Off, which allows users to enter the reason the account's charge off is being reversed. In addition to the Reasons for reversing Charge Off field, this step contains the button, which saves the information entered within the workflow step and initiates the charge off reversal process.

Charge Off Reversal Process

The charge off reversal process consists of a validation process and series of account updates.

Charge off Reversal Validation Process

Upon clicking within the Charge Off Reversal step, the system performs the following validations to determine whether a charge off can be reversed.

Is the Recovery account in a repayment plan with an Active status?
- In order to reverse a charge off, cancel the repayment plan and reprocess the Charge Off Reversal workflow step.
- If the account is in an active repayment plan, an error message displays.
Were transactions booked on the recovery account other than the initial charge off or interest transactions?
- If transactions were booked on the recovery account, a warning message displays.

The validations performed during the Charge Off Validation process may differ depending on whether the Charge Off Reversal step is configured in automatic and manual workflows.

Automatic

If validation fails within an automated workflow, the workflow may fail.

If an error message returns, the workflow fails.
If a warning message returns, one of the following scenarios occur:
- Users may continue the workflow, if the workflow step property that allows validation warnings to be bypassed is set to true.
- The workflow fails if the workflow step property that allows validation warnings to be bypassed is set to false.

Users are able to manually complete the failed workflow using the failed workflow dashboard, which is accessible by clicking in the Ribbon Bar.

Manual

If validation fails within a manual workflow, the following occurs:

If an error message displays, users are prevented from proceeding with workflow.
If a warning message displays, users may proceed if the warning is bypassed.
If both an error and a warning display, it is treated as an error condition and users are prevented from proceeding with workflow.

Account Updates

Once the charge off reversal passes the validation, the following updates occur on the account:

Transaction Reversals

For each transaction processed on a recovery account, a reversal posts as of the Effective Date of the original transaction. The transaction reversal also results in entries within the Recovery Ledger.

Each transaction reversed is tracked within Transaction History.

If a transaction is reversed after an expense has been transferred using the Transfer Expenses workflow step, the expense remains viewable within the Expenses screen as a record of the transfer, and is no longer maintained within the Recovery module.

For more information on transferring expenses, please see the Transfer Expenses Workflow Step topic in the User Guide.

Accounting Rule Updates

The following updates occur on each accounting rule associated with the reversed recovery account:

The Interest Rate Type is set to a Fixed Interest Rate of 0.00.
The Interest Rate Modifier is set to 0.00.

Because there is a mandatory relationship for interest rates, the interest rates remain intact.

Recovery Initialization Record Updates

The following updates occur on the initialization record for the reversed recovery account:

The Recovery Account Status Field is set to Charge Off Reversed.
The Recovery Account Status Date is set to Today.
The Amount is set to 0.00.
The Modified Date is set to Today.
The The Modified User ID is set to the user who executed the workflow.

Recovery Account Record Updates

The following updates occur on the reversed recovery account record:

The Is Fully Charged off flag is cleared.
The Initial Balance fields are set to 0.00.
The Interest Last Calculated On field is set to a null value.
The Collectability Status field is set to a null value.
The Charge Off Date is cleared.
The Reversal Date is set to Today.
The Reversal User Id is set to the user running the workflow.
The Initial Balance Reversed, Initial Principal Reversed, Initial Reimbursable Expense Reversed, Initial Reimbursable Other Reversed, Initial Non Reimbursable Expense Reversed, and Initial Non Reimbursable Other Reversed fields are set to the value of the Initial Balance of the Recovery account.
The Reversal Comment is set to the Reasons for reversing Charge Off text entered by the user in the workflow step.

If an account that was previously charged off is charged off again, the Recovery module does not use any information from the original charge off. Any subsequent charge off uses current account data.

Reversing a Charge Off

To reverse a charge off:

Locate the desired account.
Once the desired account is located, execute the workflow containing the Charge Off Reversal workflow step.

If the account is not charged off, the following message is displayed upon accessing the Charge Off Reversal workflow step and the step does not execute:

When the Charge Off Reversal workflow step is active in the workflow, enter the reason for the reversal within the Reason for reversing Charge Off textbox.
Enter the reason the account's charge off is being reversed.
Click .
Click Yes to confirm the reversal. Click No to return to the Charge Off Reversal workflow step without completing the reversal.
Upon confirming that the charge off should be reversed, the Charge Off Reversal Validation process begins evaluating the account to ensure that the account is eligible for reversal.
If no errors are received during the Charge Off Reversal Validation process, and there are no other steps to the workflow, the workflow completes.

The applicable updates are made to the recovery account and a record of the reversal is recorded in the Transaction History for the account.

Please see the Account Updates section in this topic for more information on the data that is updated for a reversed charge off on a recovery account