Restructuring

BrainySoft software provides the ability to perform two types of restructuring:

• Contract restructuring with capitalization of accrued but unpaid amounts (interest, penalties) on the client's balance
• Contract restructuring with further distribution of amounts

To perform restructuring, you need to understand which type will be used.

Let's consider the first type - Contract restructuring with capitalization of accrued but unpaid amounts (interest, penalties) on the client's balance.

Restructuring is used to change the terms of the original agreement, for example:

increasing the principal debt amount

changing the interest payment schedule

changing the interest rate calculation procedure

extending the principal debt repayment terms (prolongation can also be used);

etc.

1.You need to create a new loan application specifying the remaining balance amount for this contract:

2. Next, in the Contract, you need to go to the Contract Restructuring section:

3. You need to select the application that was created for the total amount and click the Select button.

MANDATORY!!! Specify the restructuring type – "With Capitalization"

Next, you can specify the first repayment date and the scheduled repayment date if the loan term will differ from the one previously selected by the client, and click the "Restructure" button.

When clicking the Restructure button, the following is generated:

1. Contract 2R (letter R is added to the number) for the selected application and a schedule for it

2. A document for "writing off" Principal and Interest from the old contract 2 (movement type Restructuring with a minus sign) and "issuance" in the new contract 2R (movement type Restructuring with a plus sign)

Writing off the entire debt amount from the old contract:

Charging the same debt amount to the new contract, but already as Principal Debt

Let's consider the second type - Contract restructuring with further distribution of amounts.

1.You need to create a new loan application specifying the remaining balance amount for this contract:

2.Next, in the Contract, you need to go to the Contract Restructuring section:

3.You need to specify the restructuring conditions, how to credit the deferred amounts and the term

4.Click the Restructure button.

When clicking the Restructure button, the following is generated:

1). Contract 2R (letter R is added to the number) for the selected application and a schedule for it

2). A document for "writing off" Principal and Interest from the old contract 2 (movement type Restructuring with a minus sign) and "issuance" in the new contract 2R (movement type Restructuring with a plus sign), and interest and penalties are recorded as deferred penalties and interest

In the old contract, write-off entries are generated:

In the new contract, accrual entries are generated