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Credit and Collection > Week 13-15 > Flashcards

Week 13-15 Flashcards

1
Q

strategies, organization, and procedures for recovery of receivables

A

Collection Program

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2
Q

T or F: The company may choose between subcontracting or in-house collections, employing high-pressure or indirect tactics, using salesmen or a decentralized unit, and maintaining records, billing, follow-ups, and legal actions.

A

TRUE

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3
Q

Collection Program

A

strategies, organization, and procedures for recovery of receivables.

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4
Q

Collection Department

A

responsible for monitoring and following up on receivables

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5
Q

Responsible for monitoring and following up on receivables

A

Collection Department

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6
Q

Forces of Collection (5)

A
  1. Salesmen
  2. House Collectors
  3. Attorneys (Legal Counsel)
  4. Collection
  5. Agency Government
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7
Q

T or F: Use or threat of violence or other criminal means to harm the person physically, his/her reputation, or property.

A

TRUE

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8
Q

T or F: Disclosing the names of persons who refuse to pay for past due accounts

A

TRUE

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9
Q

T or F: Contacting the person during unreasonable hours (before 5am and after 10pm) except when the account is past due for more than 100 days.

A

FALSE; Contact the person during unreasonable hours (before 6am and after 10pm) EXCEPT when the account is past due for more than 60 days or you agreed to be contacted at any time.

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10
Q

Basic Collection Approaches (4)

A
  1. Education
  2. Persuasion
  3. Problem-Solving Assistance
  4. Coercion
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11
Q

Stages of Collection (4)

A

Preliminary stage
Reminder stage
Follow-up stage
Drastic stage

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12
Q

usually involves the sending of monthly statements

A

Preliminary stage

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13
Q

reminder is sent to the customer several days after the due date

A

Reminder stage

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14
Q

where successive action are undertaken at regularly spaced interval

A

Follow-up stage

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15
Q

this stage is only resorted to if the company is ready to lose the customer

A

Drastic stage

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16
Q

Tools and Aids in Collecting (6)

A
  1. Statement of Account
  2. Notice or Reminder
  3. Letters
  4. Third Party Letters
  5. Telephone
  6. SMS
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17
Q

General Types of Debtors (5)

A
  1. The Up-to-Date
  2. The Changed Circumstance
  3. The Occasional Delinquent
  4. The Habitual Delinquent
  5. The Premeditated Delinquent
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18
Q

T or F: Problem accounts and remedial account management is a major breakdown in the repayment agreement that has led to delayed collection, potential legal action, or potential loss.

A

FALSE; Problem accounts and remedial account management are lending problems that may be caused by lapses in loan packaging and/or customer and related factors.

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19
Q

Specific causes of Problem accounts and remedial account management (3)

A
  1. Loan Packaging
  2. Customer-Related Factors
  3. Related Factors
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20
Q

They should always take note of the symptoms of weakened accounts since their early recognition is critical to the formulation of appropriate courses of action.

A

Account Officers

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21
Q

Account Officers

A

They should always take note of the symptoms of weakened accounts.

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22
Q

The art of preventing the occurrence of, and bringing about prompt and satisfactory conclusions to problem account situations.

A

Remedial Account Management

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23
Q

Remedial Account Management

A

The art of preventing the occurrence of, and bringing about prompt and satisfactory conclusions to problem account situations.

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24
Q

A major breakdown in the repayment agreement has led to delayed collection, potential legal action, or potential loss.

A

Problem Account

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25
Problem Account
A major breakdown in the repayment agreement has led to delayed collection, potential legal action, or potential loss.
26
Requisites for Effective Remedial Management (3)
1. Specific unit to handle problem account 2. Adequate manpower 3. Policies, systems and procedure
27
Remedial Process (4)
1. Account Review 2. Capability Analysis 3. Strategy Formulation 4. Strategy Implementation
28
Strategies and activities that compromise an overall rehabilitation plan to help the client meet its maturing obligations and improve lender’s chances of recovery.
Remedial Measures
29
Remedial Measures
Strategies and activities that compromise an overall rehabilitation plan to help the client meet its maturing obligations and improve lender’s chances of recovery.
30
The remedial measures may include the following (6)
1. Loan Restructuring 2. Compromise Settlement 3. Off-setting/Linkage 4. Strengthen Collateral Credit Position 5. Assumption of Mortgage 6. Foreclosure
31
Any change in the principal terms and conditions of the loan in accordance with a restructuring agreement setting forth a new plan of payment on a periodic basis.
Loan Restructuring
32
Covers lump sum payment either through cash payment and generally includes penalty changes
Compromise Settlement
33
Involves the provision by the borrower of services and/or goods as loan settlement. The good/services shall be used to liquidate the borrower’s obligation.
Off-setting/Linkage
34
Involves the securing of additional collateral to secure the loan and/or continuing Guaranty and/or JSS by a more viable and/or acceptable party as further security of the loan
Strengthen Collateral Credit Position
35
A mortgage is assumed by a third party, such as a private individual, partnership, or company, who assumes the borrower's obligation.
Assumption of Mortgage
36
Procedure by which mortgaged property is sold upon default of a mortgage in satisfaction of mortgage debt.
Foreclosure
37
An integral part of a total system for managing the credit portfolio. The overriding concern is to help develop correct credit practices.
Credit Review
38
Scope of Credit Review (3)
1. The credit review focuses on the assessment of two major credit aspects. 2. Organization and Staffing 3. On loan recovery, the review focuses on two major aspects: Remedial Management and Normal Management
39
Loan Recovery Major Aspects (2)
Remedial Management Normal Management
40
Major Credit Standards to Properly Evaluate Credit Practices (2)
1. Portfolio Quality 2. Process Quality
41
Process Quality Categories (5)
1. Target Market 2. Credit Initiation and Analysis 3. Loan Documentation and Disbursement 4. Credit Administration and Documents Management 5. Problem Recognition
42
Types of Organization and Staffing (2)
1. Organization and Deployment 2. Coaching and Training
43
This is principally evaluated using a quantitative assessment of the portfolio mix and past due rate.
Portfolio Quality
44
Is an assessment of the procedures in the marketing and administration of accounts based on established credit policies and procedures.
Process Quality
45
The review determines if the account solicitation activities are systematically undertaken considering the prescribed target market
Target Market (Process Quality Categories)
46
The review will focus on the quality of evaluation and analysis of credit risks that results in the extension of credit
Credit Initiation and Analysis (Process Quality Categories)
47
The review ensures the proper approval of all credit-related transactions, including availments, renewals, and extensions, by verifying the appropriateness, adequacy, and completeness of loan documentation.
Loan Documentation and Disbursement (Process Quality Categories)
48
The review validates the effectiveness of the credit monitoring and supervision and support system.
Credit Administration and Documents Management (Process Quality Categories)
49
The review evaluates the capacity to anticipate and detect adverse credit risk factors, as well as timely reporting of such events to the relevant authorities.
Problem Recognition (Process Quality Categories)
50
The review evaluates the suitability of the organizational structure in terms of staff adequacy, work experience, function delineation, and account assignment.
Organization and Deployment
51
The review determines the availability and effectiveness of training programs and other coaching tools in the delivery of functions
Coaching and Training
52
This generally shows the action plan as well as the results of recovery measures on distressed accounts.
Remedial Management
53
This is an evaluation of the processes in the administration of problem accounts. The review deals basically with the credit monitoring and supervision activities, anticipation and recognition of problem.
Normal Management
54
Companies sell something on account also, they are in charge of collecting payments
Salesmen
55
Salesmen
Companies sell something on account also, they are in charge of collecting payments
56
directly employed by the company/lenders and in-charge of payment collection
House Collectors
57
House Collectors
directly employed by the company/lenders and in-charge of payment collection
58
Will take legal action to compel the borrower
Attorneys (Legal Counsel)
59
Attorneys (Legal Counsel)
Will take legal action to compel the borrower
60
Last resort when all means of collection were done already by the house collectors or salesmen
Collection Agency
61
Collection Agency
Last resort when all means of collection were done already by the house collectors or salesmen
62
Government
All means were applied, yet collection of payment wasn't achieved. Legal counsels of companies may file an affidavit
63
All means were applied, yet collection of payment wasn't achieved. Legal counsels of companies may file an affidavit
Government
64
onset of a debtor-creditor relationship the lender must educate the borrower
Education
65
Education
onset of a debtor-creditor relationship the lender must educate the borrower
66
collection by artful intimidation or persuading the borrower to pay his account
Persuasion
67
Persuasion
collection by artful intimidation or persuading the borrower to pay his account
68
if borrower no longer has the means to pay due to unpredictable circumstances
Problem-Solving Assistance
69
Problem-Solving Assistance
if borrower no longer has the means to pay due to unpredictable circumstances
70
should only be applied when really needed last course of action
Coercion
71
Coercion
should only be applied when really needed last course of action

Credit and Collection (1 decks)

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