Bankruptcy Management

Bankruptcy management lets a Lender track customer bankruptcies end-to-end and enforce automatic stay safeguards. Embarc stores the full case record (chapter, petition status, claims, objections, stay state) and propagates operational impacts like autopay cancellation and turning off customer communications when a stay is enabled.

What It Covers

Case creation – Capture case number, chapter (7/11/12/13), petition type, district/city/state, notice and 341 dates.
Automatic stay – One toggle cancels all active autopays for the client and blocks new enrollment while the stay is on.Self-service surfaces the “in bankruptcy” disclaimer when stay is enabled.
Claims & objections – Track proof of claim deadline/filing and objection status/deadlines.
Petition outcome – Update petition status (filed/discharged/dismissed/reaffirmed/plan confirmed), collateral status, dismissed date, closed reason. Any Loan mofidications (e.g., loan write-offs) are handled manually before case closure.

Lifecycle

The Bankruptcy claim lifecycle tracks lender actions (proof of claim and objections) following notice of bankruptcy, and continues until the court resolves the case through dismissal or discharge, at which point the automatic stay is lifted, loans modified as needed and the case is closed.

flowchart TD
    A[Bankruptcy notice received<br/>Automatic stay applied<br/>Autopay & collections cancelled]
        --> B{Proof of claim required?}

    B -->|Yes| C[File Proof of Claim<br/>Set proofOfClaimFiled=true<br/>Set proofOfClaimFilingDate]
    B -->|No| D[Skip claim filing]

    C --> E{Objection required?}
    D --> E

    E -->|Yes| F[File Objection<br/>Set objectionStatus<br/>Set objectionDeadlineDate]
    E -->|No| G[No objections filed]

    F --> H[Monitor case outcome]
    G --> H

    H -->|Dismissed| I[Set bankruptcyPetitionStatus=DISMISSED<br/>Set dismissedDate<br/>Set closedReason<br/>Disable stay]
    H -->|Discharged| J[Set bankruptcyPetitionStatus=DISCHARGED<br/>Set closedReason<br/>Disable stay]

    I --> K[Case closed]
    J --> K[Case closed]

Event	Data Captured
Notification & Proof of Bankruptcy Received	Status, Who’s Filing, Filing Date, Objection Deadline, Bankruptcy Chapter, Bankruptcy Petition Status, Case Number, Petition Type, Automatic Stay Status, Bankruptcy Notice Received Date, Proof of Claim Deadline Date, 341 Meeting of Creditors Date, Bankruptcy District, City, State.
Proof of claim filed	Proof of Claim Filed Date; keep Proof of Claim Filed Status in sync.
Objection filed (Optional)	Objection Status (e.g., Objection to Claim, Objection to Discharge).
Bankruptcy dismissed or discharged	Dismissed Day, Closed Day, Bankruptcy Petition Status.

API Snapshot

Create: POST /v1/clients/{clientId}/bankruptcies
Update: PUT /v1/clients/{clientId}/bankruptcies/{id}
List: GET /v1/clients/{clientId}/bankruptcies (filters: status/chapter/petitionStatus/stay)
Get: GET /v1/clients/{clientId}/bankruptcies/{id}
Active check: GET /v1/clients/{clientId}/bankruptcies/active → { hasActiveBankruptcy: boolean, bankruptcy?: {...} }
Template: GET /v1/clients/{clientId}/bankruptcies/template (enum options + US subdivisions)

Permissions: CREATE_CLIENT_BANKRUPTCY, READ_CLIENT_BANKRUPTCY, UPDATE_CLIENT_BANKRUPTCY.