All or a portion of a liability instruction can be written off so that the nominee is no longer responsible for the amount that has been written off. For example, if a person declares bankruptcy, all or a portion of that person's debt to the organization can be written off.
The amount of a write-off can be equal to or less than the outstanding amount of the liability instruction. The value of the outstanding amount on the liability will be displayed in the write-off instruction.
When a liability instruction is written off, a write-off instruction line item is created to reflect the write-off amount. This creates a record of the write-off that is useful for accountability and traceability purposes. The write-off instruction line item is automatically allocated toward the liability instruction. This reduces the outstanding amount of the liability instruction by the amount of the write-off.
Write-off instruction line items are rolled up into write-off instructions. This is true for all write-offs regardless of whether an outstanding amount remains on the liability instruction.