Handling Delinquency

Delinquency management represents one of the most critical operational challenges in lending, directly impacting your portfolio's financial performance, regulatory compliance, and customer relationships. Rather than imposing a one-size-fits-all approach, Canopy empowers you to maintain complete control over your delinquency strategies while providing the robust data infrastructure and real-time insights necessary to execute those strategies effectively.

Think of Canopy's delinquency framework as your early warning system and command center combined. The platform continuously monitors account performance against your defined payment obligations, automatically categorizes accounts into delinquency buckets based on their payment behavior, and delivers actionable intelligence to your operations and collections teams precisely when intervention opportunities arise. This approach ensures that no account slips through the cracks while preserving your flexibility to apply collection strategies that align with your brand, customer base, and risk tolerance.

The system operates on three foundational pillars that work together to create comprehensive delinquency visibility.

Delinquency bucket segmentation via automated system tags
Historic and current days past due counter
Reports aggregating delinquency system data with the ability to calculate additional metrics

Managing Delinquency

Setting Up Delinquency Notifications

To monitor delinquency changes, you need to configure Canopy's notification system to alert you when accounts transition between delinquency states.

How Delinquency Classification Works

When a borrower misses their minimum payment for a billing period, the unpaid balance becomes past due. Canopy automatically assigns delinquency tags based on how long the payment has been overdue:

1-30 Days Delinquent: Applied when payment is 1-30 days past due
31-60 Days Delinquent: Applied when payment is 31-60 days past due

These buckets follow standard industry classifications used in regulatory reporting.

Required Notifications

Subscribe to both notifications to track delinquency changes:

ACCOUNT_SYSTEM_TAG_APPLIED: Fires when a delinquency tag is added to an account (when entering delinquency or moving to a worse bucket)
ACCOUNT_SYSTEM_TAG_REMOVED: Fires when a delinquency tag is removed (when payment is made or account moves to the next bucket)

How the Notifications Work Together

When an account moves from 1-30 days to 31-60 days delinquent, you'll receive two notifications:

ACCOUNT_SYSTEM_TAG_REMOVED for the "1-30 Days Delinquent" tag
ACCOUNT_SYSTEM_TAG_APPLIED for the "31-60 Days Delinquent" tag

This gives you complete visibility into how accounts move through delinquency stages.

Frequently Asked Questions

Q: How quickly do delinquency tags get applied after a payment becomes overdue?

A: Delinquency tag application occurs through Canopy's automated segmentation, which means tags typically apply within an hour of a payment becoming overdue. The exact timing depends on when your payment due dates fall relative to the system's processing schedule, but you can expect consistent, reliable tag application that ensures no overdue accounts go unnoticed. This processing approach balances real-time responsiveness with system efficiency, ensuring your collection teams receive timely notifications without overwhelming your webhook infrastructure with excessive traffic.

Q: What happens to days past due calculations when borrowers make partial payments?

A: Days past due calculations focus specifically on unpaid obligations rather than total account balances, which means partial payments can significantly impact the metric depending on how much the borrower pays. If a partial payment satisfies a past due obligation completely, the days past due count begins counting from the next latest unpaid obligation if any unpaid obligations remain on the account, if account only has current period obligations and has not yet passed the payment due date for the current period, the days past due count would be 0. This nuanced calculation ensures that days past due accurately reflects payment compliance rather than simply measuring total debt levels.

Q: Can I customize the delinquency bucket definitions or create additional categories?

A: Canopy's system tags follow industry-standard delinquency bucket definitions to ensure consistency with regulatory reporting requirements and collection best practices. While the core bucket structure remains standardized, you can leverage the comprehensive data available through the API endpoints to create additional custom classifications within your own systems. The precise days past due counts and historical data provide the granular information necessary to implement any specialized segmentation or classification schemes that align with your unique collection strategies or risk management approaches.

Q: How does the notification system handle high-volume portfolio changes?

A: Canopy's notification infrastructure is designed to handle enterprise-scale notification volumes reliably, with built-in retry mechanisms and delivery confirmation protocols to ensure critical delinquency notifications reach your systems successfully.

Q: What historical data retention policies apply to delinquency information?

A: Canopy maintains comprehensive historical records for all delinquency-related data points, including days past due counts, tag transitions, and associated account performance metrics. This historical data remains accessible indefinitely through API endpoints, supporting long-term analytical requirements, regulatory reporting obligations, and business intelligence initiatives.