How to perform a restructuring operation

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 subsequent 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 method

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. IMPORTANT! You must delete the contract that is automatically created after the application is approved.

2. Next, in the contract's financial information, you need to go to the Contract Restructuring section:

3. In the new window that appears, you need to select the previously created application and click the "Select" button.

4. A window with restructuring settings appeared

IMPORTANT!!! 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:

• Contract 2R (the letter R is added to the number) based on the selected application and its schedule
• A document for "writing off" Principal and Interest from the old contract 2 (movement type Restructuring with a minus sign) and "disbursement" in the new contract 2R (movement type restructuring with a plus sign)

Writing off the entire debt amount from the old contract:

Accrual of the same debt amount to the new contract, but now as Principal debt

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

1.You need to create a new loan application specifying the remaining balance amount for this contract. IMPORTANT! You must delete the contract that is automatically created after the application is approved.

2.Next, in the contract's financial information, 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 (the letter R is added to the number) based on the selected application and its schedule

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