02 Apr 2013

A Creditor Returned Funds. What to do next?

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Compliance Tip:

A Creditor Returned Funds. What to do next?

You receive a check back from a creditor who had recently been paid in a case distribution. This type of situation typically occurs when a creditor realizes that they had written off the amount as a loss. So what do you do next?

The proper handling of funds (including returned funds) is important to produce accurate final reports. Returned funds may be classified as either a partial or a full refund. Using the refund feature will not impact your trustee compensation or the receipt total. It will deduct the refund amount from the total paid to the claim. This type of transaction is referred to as a Negative Disbursement. The funds are credited to the disbursement column on Form 2, as this transaction is not a compensable receipt.

In order to enter these receipts successfully, we’ve outlined entering refund procedures for both CaseLink Office and CaseLink Web below:

In CaseLink Office:

1) Enter the receipt into the receipt log.
2) Go to ‘Banking‘ and ‘Select Make a Deposit‘.
3) Enter the Date, Amount, and Creditor name. Do not enter an asset reference.
4) Click the ‘Assistants’ button located to the right of the screen.


5) Choose the ‘Refund‘ button to complete the transaction.
6) In the next screen, choose the ‘Claim to Refund‘.

TT27) The Category Code will populate based on the claim payment during the original distribution. Click ‘OK

cr3The deposit screen will now display the transaction as a refund.

In CaseLink Web:

The same rules apply to refunds in CaseLink Web; however, the process to enter them is a different (but even easier):

TT4 1) Enter the Deposit into the Receipts Log.
2) Then select the ‘Case‘ and go to ‘Accounts‘.
3) Click on the ‘Preferred Account’ for the transaction.
4) From the ‘Select Action‘ drop down, choose ‘Make an Adjustment‘.
5) Under ‘Adjustment Type‘, choose the ‘Negative Disbursement’ radio button. Enter Date, Amount and Description, and then pick the ‘Claim‘ being refunded.
6) Enter the Claimant Name in the Payee/Payor field. The address information is optional. Then click ‘Apply‘.

The transaction is complete and the claim has been refunded.

If you have any questions or concerns how to handle returned funds, please contact the BMS Support Center via email or call 800-634-7734, ext. 6.