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https://issues.apache.org/jira/browse/FINERACT-2456?page=com.atlassian.jira.plugin.system.issuetabpanels:all-tabpanel
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Adam Saghy resolved FINERACT-2456.
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Fix Version/s: 1.15.0
Resolution: Fixed
> 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
> Priority: Major
> Fix For: 1.15.0
>
> 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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