Vervent confirmed via a news release on Monday that it has been authorized to step in as a successor servicer in response to the Chapter 7 bankruptcy filing by Tricolor Holdings.

Previously designated as backup servicer, Vervent said it has been given authority to assume servicing for the majority of Tricolor’s approximate 100,000 subprime auto loans, “ensuring continued support for impacted borrowers.”

Before Tricolor’s bankruptcy, Vervent was designated as a backup servicer, a role designed to protect consumers in the event of servicer or loan originator failure.

Vervent said it was not involved in Tricolor’s originating practices or servicing operations prior to the bankruptcy. On Friday, a bankruptcy trustee court ruling authorized Vervent to assume servicing duties to ensure continuity of service and borrower support.

Vervent is working closely with Wilmington Trust (indenture trustee) and JPMorgan Chase Bank (administrator) to facilitate the court-supervised transfer of servicing.

The company has already begun the process of onboarding borrower data, converting accounts into its servicing systems, and preparing its customer service teams to handle increased volume.

“Our top priority is making sure borrowers are treated in a fair and transparent manner,” Vervent CEO David Johnson said in the news release. “We know how disruptive it can be when access to vehicle information and loan servicing is suddenly lost. Our team is working quickly and carefully to restore normal operations and provide clear communication throughout the transition.”

As successor servicer, Vervent’s responsibilities include:

—Managing loan payments and account servicing

—Securing and transferring funds

—Handling vehicle inventory such as titles and keys

—Assisting customers with loan payoffs, payment plans and insurance claims

—Working with regulatory agencies to ensure compliance with all laws, rules, and regulations

Loan terms and payment obligations remain unchanged, according to the news release, as borrowers will receive updates as the bankruptcy process continues.

Now more than ever, Vervent said capital markets services such as backup servicing, secure eVaults, Collateral and Liquidation Agent capabilities play a critical role in structured finance.

The company explained these safeguards offer investors assurance that portfolios can be converted and serviced with minimal to no disruption, and it provides issuers and trustees with a reliable partner committed to support borrowers and maintain portfolio performance.

Vervent said it has activated emergency protocols to address urgent borrower needs.

With over 35 years of experience, the company said it has successfully managed multiple high-pressure servicing transfers, including converting distressed auto portfolios in compressed time frames and handling high volumes of consumer communications — all while maintaining service quality.

“This situation highlights why having an experienced and capable backup servicer is so critical,” Johnson said. “This critical safeguard is built into financial systems to protect consumers when things go wrong. Our job now is to step in, stabilize the situation, and make sure borrowers are taken care of.”