Division 321 F1

An exposure shall be ‘ in pre-litigation status ’ where the debtor has been formally notified that the institution will take legal action against the debtor within a defined time period, unless certain contractual or other payment obligations are met. That shall also include cases where the contract has been terminated by the reporting institution because the debtor is in formal breach of the terms and conditions of the contract and the debtor has been notified accordingly, but no legal action against the debtor has formally been taken by the institution yet. Exposures classified as ‘ in pre-litigation status ’ can exit this classification if the outstanding amounts are paid or if they enter into litigation status as defined in the following paragraph.