Adam Saghy created FINERACT-2456:
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Summary: Charge Off Causing Repayment Schedule Issues
Key: FINERACT-2456
URL: https://issues.apache.org/jira/browse/FINERACT-2456
Project: Apache Fineract
Issue Type: Bug
Reporter: Adam Saghy
Attachments: image-2026-01-27-17-50-46-038.png,
image-2026-01-27-17-51-04-615.png
There seems to be an issue with the way that charges offs potentially reprocess
loans/recalculate balances and use the repayment summary where we are getting
negative charge off balances.
*STEPS TO REPLICATE*
# Create a new account with the following setup.
!image-2026-01-27-17-50-46-038.png!
To get the account in the same state we have tested the following steps can be
followed:
Account Setup
* Loan Type: Progressive loan with 9.51% interest rate, 24-month term
* Principal: $127.17
Transaction Timeline
Step 1 - Disbursement (2023-03-12)
* Disburse loan: $127.17
Step 2 - First Repayment (2023-04-12)
* repayment: $5.84
Step 3 - Merchant Refunds (2023-04-20)
* Merchant Issued Refund #1: $42.39
* Merchant Issued Refund #2: $42.39
Step 4 - Second Repayment (2023-05-12)
* repayment: $5.84
Step 5 - Reversal (2023-05-13)
* Reverse the repayment from 2023-05-12
Step 6 - Third Repayment (2023-05-22)
* repayment: $5.84
Step 7 - Fourth Repayment (2023-06-12)
* repayment: $5.84
Step 8 - Fifth Repayment (2023-07-12)
* repayment: $5.84
Step 9 - Merchant Refund (2023-07-24)
* Merchant Issued Refund: $42.39
Step 10 - Credit Balance Refund (2023-07-25)
* Credit Balance Refund: $23.36
Key Notes
* Accruals are generated between transaction dates via inline COB
* Only the May 12 repayment is reversed (on May 13)
* No other reversals occur
* Test stops after the first Credit Balance Refund
# Now reverse the auto payment on the July 12th (Step 8).
# You will now see that the CBR and MIR get replayed. The repayment schedule
and transaction list should look like this:
This is correct. The account should have a balance on it and the repayment
schedule makes sense and adds to the delinquent amount.
# Now do a charge off on the account. You will see the following:
!image-2026-01-27-17-51-04-615.png!
The repayment schedule is now incorrect and there is a negative charge off. All
of the accounts affected by this negative charge off have very similar
transactions with some sort of refund and a CBR. And then of course the charge
off at the end.
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