The Zopa collections team manage all borrowers who are behind on their repayments. If a borrower has reached a point where they are behind on their loan by at least four months' worth of repayments P2PS would work in conjunction with Zopa to continue to chase borrowers.
If the loan is covered by Safeguard e.g. loans within Zopa Classic or Zopa Access products, then Safeguard is designed to cover expected losses where a borrower is unable to meet at least 4 months’ worth of repayments. In some circumstances a borrower may have passed away, be declared bankrupt or insolvent, or enter an Individual Voluntary Arrangement (IVA); in these cases as soon as Zopa has confirmation of this, P2PS would start administrative actions, beginning with giving Safeguarded lenders the outstanding balance of the loan.
When Safeguard makes a pay out the loan will look as if the outstanding capital and interest has been paid in full and nothing is due on the loan; the payments will be itemised in your transactional statement. In the end of year financial statement the loan would not show up as bad debt.