NOTE: You MUST charge off the entire loan balance. If you wish to charge off only a portion of
the loan, you must either make payments to reduce the balance, or refinance the portion,
which will not be charged off.
1. Access the member's account in Program #2
2. If you are applying any balance from the member’s share account, do a Loan Payment Transfer.
3. Enter the Loan‑Payments/Charges window.
4. Enter the LOAN NOTE NUMBER to be charged off.
5. Choose transaction #026 CO Loan Charge Off.
6. In the TRANSACTION (DOLLAR) AMOUNT field the system will automatically enter the
principal balance of the loan. No other amount can be entered in this field.
7. Press F11 to display the voucher.
8. The voucher will show that a 'Loan Charge Off' will be done as well as a 'Charged Off Subsidiary'
entry, which is generated by the system.
9. You may need to make the following changes in Program #4
1. Loan APR = Interest on this loan will still continue to accrue at the rate in the
APR field. If you have a judgement allowing you to continue to charge interest,
but at a lower rate, you should change the rate in this field. The system will move
the Date Interest Paid To to equal the date on your terminal, and put interest
accrued at the old rate since the last payment in the Unpaid Loan Interest field.
Interest will accrue at the new rate from that point.
2. You can set the CHARGE NO INTEREST FLAG (Page 2 of 7) to ‘Y’. This will
cause any payments made to this loan to be applied to principal only. If you are
fortunate enough to collect the entire principal balance, change the flag back to
‘N’ and collect the outstanding interest that has accrued.
The CHARGE‑OFF LOAN transaction will take this loan out of all of the loan totals in Program #6, and
debit your Allowance for Loan Loss account in Program #7 totals. This loan will no longer be included on loan reports, member statements, trial balances, etc. NOTE: The moment that a loan is charged off it is taken from the active loan records, therefore a statement will not show any loan activity for the quarter in which it is charged off.
The 'Charge Off Subsidiary' entry is the transaction, which will put this loan back on the system as a CHARGED‑OFF LOAN. This transaction does not affect Program #7 or Program #6 totals. The loan will be displayed on the member's account with the notation 'Charge Off' in the field for DLQ‑AMT. There will also be a warning flag flashing on the lower left portion of the screen, which says 'CHARGED‑OFF LOAN EXISTS!' The loan otherwise appears the same as a regular loan, with balance and history displayed in Programs #8 and #23, and payments (recoveries) and/or charges can still be applied to this loan.
NOTE: The moment that a loan is charged off it is taken from the
active loan records, therefore a
statement will not show any loan activity for the quarter in which it is
charged off.