Lesson 1 of 25 · 7 min
The delinquency clock starts on the missed due date
The delinquency clock starts on the missed due date, not on the day the miss is noticed.
A delinquency clock is an aging count that begins on the first day after a due date whose cash did not arrive. Track 24 lesson 25 already treated the clock as a cure window: a stated number of days that may exist after a comparison has failed. This lesson is the start of that count. The borrower does not set the start. The due date does.
Pellbridge Servicing's invented car book prints an installment of $466.02 due on the 14th. The $466.02 is not received. Day 1 of the clock is the 15th. It is not the 16th, when the borrower first looked at the account. It is not the 18th, when a notice arrived. The due date was the 14th. The first day the cash was late is the 15th. Thirty, sixty and ninety are buckets on that same clock, counted from that same start.
Track 9 lesson 6 is a window whose days are counted from a margin notice. The household version counts from a due date. The geometry is the same: a comparison fails, a clock that somebody else wrote begins, and the buckets are labels on that clock rather than dates the borrower chose. Everyday lesson 25 already showed that a buffer does not move the due date. This lesson shows that noticing the miss does not move it either.
What the clock is counting, and what it is not counting, on this invented book:
- It counts from the first day after the due date whose cash did not arrive.
- It does not count from the day the miss was noticed.
- Thirty, sixty and ninety are buckets on that clock, not three separate clocks.
Day 1 is the day after the missed due date. The notice date and the noticing date are different events. They do not restart the count.
Key terms
- Delinquency clock
- Aging from the first day after a missed due date. A cure window the borrower does not set.
- Due date
- The day the agreement names. The clock starts the next day if the cash is not there.
- 30/60/90 buckets
- Labels on one clock. They are ages of the same miss, not three independent starts.
Worked example
The 14th, the 15th, and the noticing day
Illustrative figures scaled down so the arithmetic is followable; they are not the reported amounts. Pellbridge Servicing. Installment $466.02 due the 14th, not received. Noticed on the 18th.
- Due date
- The 14th
- Day 1 of the clock
- The 15th
- Day the miss was noticed
- The 18th
- 30-day bucket, counted from the 15th
- Around the 13th of the next month
- What did not start the clock
- The noticing
The agreement's cash date.
The first day the $466.02 was late.
Day 4 of the same clock.
A label on that clock.
A later event on an already running count.
The $466.02 was due the 14th. Day 1 is the 15th. The 18th is day 4 of a clock that had already started.
Check yourself
An invented installment of $466.02 is due on the 14th and is not received. The borrower notices on the 18th. What is day 1 of the delinquency clock, and what are 30/60/90 on that clock?
The delinquency clock is a cure window that the borrower does not set — Track 9 lesson 6's days, counted from a due date rather than from a margin notice. Open The cure window, and whether it exists at all →
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Educational only. Nothing in this lesson is investment, legal or tax advice, or a recommendation to enter into any transaction. Figures are illustrative and computed from the inputs stated in the lesson.