What happens if a borrower files for bankruptcy?
When we receive notice that a borrower has filed bankruptcy, we stop all automatic monthly payments on any related loan(s) and defer any other collection activity. Investors who committed funds to the loan can view the status update by reviewing the Note Details through their online account.
We then determine whether we have a basis to object to the inclusion of the debt in any bankruptcy action (e.g., based on the time between loan origination and bankruptcy filing).
If the proceeding is a Chapter 7 bankruptcy filing seeking liquidation, we attempt to determine if the proceeding is a “no asset” proceeding, based on instructions we receive from the bankruptcy court. If the proceeding is a “no asset” proceeding, we take no further action and assume that no recovery will be made on the borrower loan. In all other cases, we file a proof of claim involving the borrower.
If we can recover any funds from the bankruptcy, we’ll apply the amount received as a payment toward the remaining balance of the loan. If we are unable to recover any funds, this would be a loss for the investors who funded the loan.
If you would like to learn about the risks of investing in Notes, read our Prospectus, an official document detailing all the key information for the investments we offer. You can find the Prosper Prospectus at the bottom of any page at www.prosper.com.
What happens if a borrower passes away during repayment?
If a borrower passes away during the repayment of their loan, we work with the executor of the estate to recover any unpaid amounts.
Depending on the size of the estate and the other liabilities, we may not be able to recover the outstanding amount of the loan. If the estate does not include sufficient assets to repay the outstanding loan in full or the estate allocates its assets to other liabilities, we will treat the unsatisfied portion of the loan as charged-off with zero value.
In addition, if a borrower passes away near the end of the loan’s term, it is unlikely that any further payments will be made on corresponding Notes because the time required for the probate of the estate may extend well beyond the loan maturity date.
If we can recover any funds from the estate, we’ll apply the amount received as a payment toward the remaining balance of the loan. If we are unable to recover funds from the estate, this would be a loss for the investors who funded the loan.
If you would like to learn about the risks of investing in Notes, read our Prospectus, an official document detailing all the key information for the investments we offer. You can find the Prosper Prospectus on our website at the bottom of any page at www.prosper.com.
Where can I download data about loans through Prosper?
Prosper has several data sources for investors to analyze historical loan performance on the platform. Any user with a valid Prosper Account is able to set up an API username and password to access and download loan performance and credit attribute data at the loan level.
Investors who wish to analyze loan performance on a month‐to‐month basis can receive the “Loan Level Monthly” file upon request after signing a Data License Agreement. This file requires a large‐text viewing format and advanced statistical analysis software to download and open. Please contact us at email@example.com to request the data license agreement.
How can I tell if the payment toward my Note is past due?
You can view the status of your Notes by signing into your online account and selecting the Note ID you’d like to review.
We label the payment status of loans the following ways:
- Current – meaning the borrower is up-to-date on their payments
- 1 month late – meaning the borrower is at least 1 or more days late on their last payment
- 2 months late – meaning the borrower has not satisfied their last 2 monthly payments
- 3 months late – meaning the borrower has not satisfied their last 3 monthly payments
- Charge-Off – meaning the borrower has not made a payment in 4 months.
Read more about charge-offs.