Service the bankruptcy accounts
We run the Chapter 13 work from intake to final resolution, and you keep the loans and the recoveries.
Bankruptcy Receivables Servicing
Credit unions
Bankruptcy servicing is hard to manage in-house.
Dedicated Chapter 7 and 13 servicing, from intake through final resolution.
The accounting clock and the bankruptcy clock are different.
60 daysLoan charged off
60 monthsCash still being collected
Accounting clockCharge-off at day 60
Day 60Charged off$19,840 → $0 on the books
Bankruptcy clockTrustee distributions through month 60
Month 5First trustee distribution$2,059
Month 60$24,711 receivedPlan complete
Notes and sources
- One indirect auto loan in a 60-month Chapter 13 plan: $19,840.00 secured claim, paid in full at 9.00 percent through the trustee, $411.85 a month from month 5 after a $2,059.25 catch-up of the five months held through confirmation, $24,710.69 in all. Labels round to the dollar.
- Charged off at day 60 under NCUA guidance because the plan was not yet confirmed. Receipts after charge-off post as recoveries to the allowance.
- NCUA, Loan Charge-off Guidance (Letter to Credit Unions 03-CU-01), still in effect and applied through the current NCUA Examiner's Guide, allowance for credit losses procedures. Plan length: 11 U.S.C. 1322(d).
NCUA guidance directs a credit union to charge off a loan in bankruptcy within 60 days of receiving notice of the filing, unless the credit union can document that repayment is clearly likely. At the 60-day mark a Chapter 13 plan is usually not yet confirmed, so most loans are charged off, even though the case may continue for another three to five years.
So the loan leaves the balance sheet years before the bankruptcy finishes paying, and someone still has to work the account for every one of those years. That is the work Tribute takes off your team.
Not every filing runs on that clock. A member who files Chapter 7 has no multi-year plan to monitor, but the same charge-off applies and the recoverable value sits in the collateral. The discharge releases the member; it does not erase your lien. The work shifts from watching a plan to acting on the member’s intentions — reaffirm, redeem, surrender, or recover — before the case closes. Tribute services both chapters.
What usually breaks inside a credit union.
Most credit unions are not staffed to manage bankruptcy servicing in-house, so the work spreads across collections, legal, accounting, and outside counsel. That means manual handoffs, data in four places, reconciliations that do not tie, and uneven attention on cases that stay open for years. Tribute becomes the department the credit union never built.
No one owns the account
Collections, accounting, legal, and outside counsel each hold a piece. Nobody carries the member from filing to discharge.
Hard to justify dedicated staff
Bankruptcy accounts are a small portion of the loan portfolio, so the people, technology, and workflows are difficult to fund and easy to postpone.
The books have to tie
Trustee distributions, direct payments, fees, adjustments, and case changes all have to reconcile to the account and to the credit union’s books.
Three ways Tribute helps a credit union.
Know what they are worth
An account-level expected-recovery analysis to support your CECL allowance (your loss reserve) and the decision to hold or sell.
Bankruptcy Receivables ValuationTurn them into cash
Sell portfolios you no longer want to carry, in one sale or on a recurring schedule.
Portfolio Sales & AcquisitionsWhy credit unions use Tribute.
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Bankruptcy is all we service
The workflows were built for claims, plans, trustee payments, and discharge, not adapted from ordinary collections.
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Built for the NCUA rulebook
Every workflow runs inside the automatic stay and the charge-off guidance, and the oversight stays with your team.
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SOC 2 Type II audited
The report goes into your vendor-management file with the rest of your third-party documentation.
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Portfolio-level reporting
Case status, claim status, plan treatment, payments, recoveries, and exceptions, at the account and the portfolio level.
How fast does NCUA require charge-off of a loan in bankruptcy?
Within 60 days of receiving notice of the filing, unless repayment is clearly likely (NCUA Loan Charge-off Guidance, Letter to Credit Unions 03-CU-01, still in effect). But a Chapter 13 plan repays over three to five years, so the loan can leave your balance sheet long before the bankruptcy has finished producing recoveries. Tribute services the account so the remaining value can still be collected.
Do we hand off our compliance responsibility when we outsource?
No. You keep regulatory responsibility and oversight. We take on the servicing work. Tribute runs the bankruptcy workflows within the automatic stay and NCUA charge-off guidance, keeps documented controls, and reports back to you. NCUA examiners may review how you oversee a third party, so our SOC 2 Type II report goes into your vendor-management file.
What are the engagement models?
Full Service, À la carte, and Contingency. Full terms for each model are in our Fee Schedule.
From The Paper Trail
Reading from the front lines.
For credit unions
Have a bankruptcy-impacted portfolio you want us to look at?
Thirty minutes, no slides. Show us the bankruptcy portfolio. We’ll tell you what is still recoverable and what it takes to collect it.