Trustee Payment Application

Following the confirmation of a bankruptcy plan, funds begin to arrive via trustee check or EFT transfers. Intaking and properly applying payments from check vouchers that may have dozens of accounts on them is typically a manual process requiring a significant amount of research.

A Complicated Process

Differing processes between bankruptcy and cash processing teams can lead to leaving trustee funds in suspense and taking improper action on bankrupt accounts. Manually matching trustee checks to loans is time consuming, costly, and prone to error as seen by consent orders levied on the largest banks.

Applying the check to the correct loan seems easy enough, but trustee check vouchers often contain incomplete information:

The debtor’s name may not completely match your system
Account numbers are likely redacted
There is no indication of the claim type being paid (pre- or post-petition)
The trustee balance may not match your system of record

Many creditors accept the high cost of manual trustee check reconciliation to be the cost of staying compliant, not knowing there is another way. One of the quickest ways for bankruptcy management teams to increase compliance while reducing FTE costs is to automate trustee check reconciliation.

Efficient Payment Processing

LCI’s Payment and Application Claims Tracking (PACT) solution automates the process of reconciling trustee checks—eliminating expensive research time and ensuring quick and accurate payment posting.

Link trustee payments to the account for automated payment allocation
Lower operational costs by reducing payment posting times from several hours to minutes
Eliminate costly audits with automatic alerts when trustee records don’t match yours
Set up exception-based reviews to only require review of outliers
Maintain loans in compliance with accurate monitoring, auditing, and reporting

Reduce an 8-hour Process to 20 Minutes

Linked Trustee Claims

Avoid cross-matching physical checks monthly by linking loans to claims. Link once, then PACT remembers for the life of the loan.
Automated Reconciliation

Eliminate monthly, manual reconciliation tasks. PACT automatically reconciles payments with trustees, maintaining loans in balance with ~200 trustee systems of record.
Accounting Error Identification

Identify client-to-trustee balance mismatches, determine pre- or post-petition and agreed orders, proactively identify errors, and simplify audits and reports.
Compliance Checking

Use rules to identify and address regulatory matters. Produce accurate account statements to comply with the April 2018 Consumer Financial Protection Bureau (CFPB) Rule.
Streamlined Workflow

Track, reconcile, and post trustee payments via an intuitive online portal.