Cut-Off, Closing, and Funding

A charged-off sale has three dates that people collapse into “the closing.” They do different work. The purchase agreement should name each one. A price without them is not finished.

The three dates

Date	What it fixes	Who has to live with it
Cut-off	Balances, payments, and eligibility flags freeze for the sale. Later payments belong in a true-up. Paid-prior and deceased status are measured against this date.	The buyer’s pricing model, and the seller’s tape extract. The seller does not work, collect, or service these debtors.
Closing	The agreement is signed and the schedule is the schedule. The bill of sale is often effective here.	Counsel and the desk. This is the ownership date unless the contract picks another one.
Funding	The buyer pays. The 90-day warranty starts after closing and funding, once the wire is confirmed. Boarding waits for that wire.	Treasury and the buyer. A signed contract with no wire is not a funded sale, and the warranty has not started.

Cut-off often falls several days before closing, because the seller has to extract the tape and stop including new payments in the face number. Closing can fall on the day the bill of sale is signed. Funding can be the same day or the next business day. Write the actual dates into the agreement. “On or about closing” is how a true-up becomes an argument.

Payments between cut-off and funding

Money can still hit the seller’s lockbox after the cut-off. Those dollars are not a gift to the seller and they are not a reason to reprice the whole pool on the morning of the wire. The usual contract gives them to the buyer, or credits them against the price, once they are listed by account ID. The seller does not work, collect, or service the debtors. The seller forwards those debtors, and the post-cut-off payment list, to the new buyer.

A payment that was on the tape and later returns has to come back out of face or out of the cash already credited. Name that rule in the agreement. The data tape should make the cut-off balance obvious so the payment list stays a short exception file.

Where the warranty clock starts

The warranty on this desk starts after closing and funding, and it lasts 90 days. It does not start at the cut-off date. Cut-off is the as-of date for the representations: not known deceased as of cut-off, not paid before cut-off, not settled before cut-off. The 90 days begin once the sale has closed and the buyer has funded. Claims go through post-sale support. The representations sit on the bill of sale.

Put that start in the purchase agreement in those words: after closing and funding, for 90 days. Counting the 90 days from cut-off closes the window while the buyer is still inside the warranty this desk gives.

What the seller does after funding

After the wire, the buyer boards the accounts. The seller does not work, collect, or service the debtors. The seller only forwards those debtors to the new buyer. Media delivery dates should be written from funding or from closing. Bidding, award, and boarding order are on bidding, close, and boarding. Spot versus a repeating delivery is the sale structure tool.

If you are dating a live agreement, email portfolios@debtmarket.net or call 561-254-6608. Send the cut-off, closing, and funding dates. The warranty starts after closing and funding and lasts 90 days.