Charging off a loan writes it off as bad debt. This is typically done after a borrower has been past due for an extended period (commonly 120–180 days) or in specific circumstances such as bankruptcy. Peach reports charged-off loans to credit bureaus based on the reason you select, so choose the reason carefully. If the charge-off was applied in error, you can reverse it.
Availability: All clients Required permissions: loan:chargeoff (to charge off); loan:update (to update details); loan:chargeoff.reverse (to reverse) Loan status: Charge off requires active or accelerated; Update and Reverse require chargedOff Loan types: All
- Charging off a loan negatively affects the borrower's credit history and credit score. Verify that the charge-off is appropriate before proceeding.
- Loans are typically charged off automatically by the system after a configurable number of days in overdue status. Manual charge-off is for cases that require earlier action, such as an approved bankruptcy.
- A charged-off loan can still receive payments. Use the Manage Payments tool to handle transactions on charged-off loans.
- From the agent-view Borrower Portal, open the loan and select Loan options > Charge off.
- Review the current loan balance displayed on the form.
- Enter an Effective date for the charge-off. By default this is set to today.
- Select a Charge off reason from the dropdown.
- Optionally select Send notice to borrower to email the borrower.
- If your company requires a Case ID, select a case from the Case ID dropdown. See Global behaviors — Case ID requirement.
- Select Charge off.
The loan status changes to chargedOff. The charge-off appears in the borrower's Activity view. The system reports the charge-off to credit bureaus according to the reason you selected.
| Field | Description | Required | Values / Format |
|---|---|---|---|
| Loan balance | The current outstanding balance of the loan. | — | Read-only display |
| Effective date | The date the charge-off takes effect. | Yes | Date (default: today) |
| Charge off reason | The reason for the charge-off. The system uses this for credit bureau reporting. | Yes | Select: Term, Fraudulent, Bankruptcy, Legal |
| Send notice to borrower | Sends an email to the borrower about the charge-off. | No | Checkbox |
| Case ID | The case associated with this action. | Conditional | Select from open cases. Required when forceCaseIdOnAgentActions is enabled. |
After a loan has been charged off, you can change the charge-off reason. Use this if the original reason was incorrect or if circumstances have changed.
- From the agent-view Borrower Portal, open the charged-off loan and select Loan options > Update charged off details.
- Select a new Charged off reason from the dropdown.
- Select Update.
| Field | Description | Required | Values / Format |
|---|---|---|---|
| Charged off reason | The updated reason for the charge-off. | No | Select from charge-off reason options |
If a loan was charged off by mistake, you can reverse the charge-off to return the loan to its previous status.
- From the agent-view Borrower Portal, open the charged-off loan and select Loan options > Reverse charge off.
- Select Reverse charge off.
The loan status changes back to its previous state.
Important: If you reverse the charge-off and the loan has an overdue balance, the system may automatically charge off the loan again if the overdue balance is not resolved the same day.