Adds AI-driven conversation tracking to debt negotiation

Introduces comprehensive conversation history with a new table and UI for tracking all negotiation emails, AI analysis, and financial outcomes. Enhances real-time updates, manages negotiation rounds, and supports new statuses for negotiation lifecycle. Integrates AI-powered extraction and response analysis to automate intent detection and outcome calculations, improving transparency and automation of debt resolution.

endpoints/postmark (localhost).bru

@@ -14,12 +14,12 @@ body:json {
   {
     "TextBody": "Dear customer, you owe $1,250.50 to CreditPlus for your January utility bills. Please pay by 2025-06-15 to avoid penalties.",
     "FromFull": {
-      "Email": "billing@creditplus.com",
+      "Email": "contact@francisco-pessano.com",
       "Name": "CreditPlus Billing Department"
     },
     "ToFull": [
       {
-        "Email": "franpessano1@gmail.com",
+        "Email": "contacto@francisco-pessano.com",
         "Name": "",
         "MailboxHash": "ahoy"
       }

src/components/ConversationTimeline.tsx

@@ -0,0 +1,586 @@
+import React, { useEffect, useState } from "react";
+import {
+	CheckCircle,
+	Clock,
+	AlertCircle,
+	XCircle,
+	StopCircle,
+	Mail,
+	MailOpen,
+	MessageSquare,
+	TrendingUp,
+	TrendingDown,
+	Calendar,
+	User,
+	Building2,
+} from "lucide-react";
+import { supabase, type Debt } from "../lib/supabase";
+import { Card, CardContent, CardHeader, CardTitle } from "./ui/card";
+import { Badge } from "./ui/badge";
+import { Separator } from "./ui/separator";
+import { toast } from "sonner";
+import { formatCurrency } from "../lib/utils";
+
+interface ConversationMessage {
+	id: string;
+	debt_id: string;
+	message_type: string;
+	direction: "inbound" | "outbound";
+	subject?: string;
+	body: string;
+	from_email?: string;
+	to_email?: string;
+	message_id?: string;
+	ai_analysis?: any;
+	created_at: string;
+	updated_at: string;
+}
+
+interface ConversationTimelineProps {
+	debt: Debt;
+	onDebtUpdate?: (updatedDebt: Debt) => void;
+}
+
+const messageTypeLabels = {
+	initial_debt: "Initial Debt Notice",
+	negotiation_sent: "Negotiation Sent",
+	response_received: "Response Received",
+	counter_offer: "Counter Offer",
+	acceptance: "Offer Accepted",
+	rejection: "Offer Rejected",
+};
+
+const statusColors = {
+	received: "text-blue-600 dark:text-blue-400",
+	negotiating: "text-yellow-600 dark:text-yellow-400",
+	approved: "text-purple-600 dark:text-purple-400",
+	sent: "text-orange-600 dark:text-orange-400",
+	awaiting_response: "text-blue-600 dark:text-blue-400",
+	counter_negotiating: "text-yellow-600 dark:text-yellow-400",
+	accepted: "text-green-600 dark:text-green-400",
+	rejected: "text-red-600 dark:text-red-400",
+	settled: "text-green-600 dark:text-green-400",
+	failed: "text-red-600 dark:text-red-400",
+	opted_out: "text-gray-600 dark:text-gray-400",
+};
+
+const statusLabels = {
+	received: "Received",
+	negotiating: "Negotiating",
+	approved: "Approved",
+	sent: "Sent",
+	awaiting_response: "Awaiting Response",
+	counter_negotiating: "Counter Negotiating",
+	accepted: "Accepted",
+	rejected: "Rejected",
+	settled: "Settled",
+	failed: "Failed",
+	opted_out: "Opted Out",
+};
+
+export function ConversationTimeline({
+	debt,
+	onDebtUpdate,
+}: ConversationTimelineProps) {
+	const [messages, setMessages] = useState<ConversationMessage[]>([]);
+	const [loading, setLoading] = useState(true);
+
+	useEffect(() => {
+		fetchConversationMessages();
+
+		// Set up real-time subscription for conversation messages
+		const channel = supabase
+			.channel(`conversation_messages:debt_id=eq.${debt.id}`)
+			.on(
+				"postgres_changes",
+				{
+					event: "*",
+					schema: "public",
+					table: "conversation_messages",
+					filter: `debt_id=eq.${debt.id}`,
+				},
+				(payload) => {
+					console.log("Real-time conversation message update:", payload);
+
+					if (payload.eventType === "INSERT") {
+						// Add new message to the list
+						const newMessage = payload.new as ConversationMessage;
+						setMessages((prev) => [...prev, newMessage]);
+
+						// Show toast notification for new messages
+						if (newMessage.direction === "inbound") {
+							const isAcceptance = newMessage.message_type === "acceptance";
+							toast.success(
+								isAcceptance ? "🎉 Offer Accepted!" : "New Response Received",
+								{
+									description: isAcceptance
+										? "Creditor accepted your negotiation offer!"
+										: `${
+												messageTypeLabels[newMessage.message_type] ||
+												"New message"
+										  } from creditor`,
+								}
+							);
+						}
+					} else if (payload.eventType === "UPDATE") {
+						// Update existing message
+						setMessages((prev) =>
+							prev.map((msg) =>
+								msg.id === payload.new.id
+									? (payload.new as ConversationMessage)
+									: msg
+							)
+						);
+					} else if (payload.eventType === "DELETE") {
+						// Remove deleted message
+						setMessages((prev) =>
+							prev.filter((msg) => msg.id !== payload.old.id)
+						);
+					}
+				}
+			)
+			.subscribe();
+
+		// Set up real-time subscription for debt status changes
+		const debtChannel = supabase
+			.channel(`debt_status:id=eq.${debt.id}`)
+			.on(
+				"postgres_changes",
+				{
+					event: "UPDATE",
+					schema: "public",
+					table: "debts",
+					filter: `id=eq.${debt.id}`,
+				},
+				(payload) => {
+					console.log("Real-time debt status update:", payload);
+					// Notify parent component about debt update
+					if (onDebtUpdate) {
+						onDebtUpdate(payload.new as Debt);
+					}
+				}
+			)
+			.subscribe();
+
+		// Cleanup subscriptions on unmount
+		return () => {
+			supabase.removeChannel(channel);
+			supabase.removeChannel(debtChannel);
+		};
+	}, [debt.id]);
+
+	const fetchConversationMessages = async () => {
+		try {
+			const { data, error } = await supabase
+				.from("conversation_messages")
+				.select("*")
+				.eq("debt_id", debt.id)
+				.order("created_at", { ascending: true });
+
+			if (error) {
+				console.error("Error fetching conversation messages:", error);
+				return;
+			}
+
+			setMessages(data || []);
+		} catch (error) {
+			console.error("Error fetching conversation messages:", error);
+		} finally {
+			setLoading(false);
+		}
+	};
+
+	const formatDate = (dateString: string) => {
+		return new Date(dateString).toLocaleDateString("en-US", {
+			year: "numeric",
+			month: "short",
+			day: "numeric",
+			hour: "2-digit",
+			minute: "2-digit",
+		});
+	};
+
+	const getMessageIcon = (message: ConversationMessage) => {
+		if (message.direction === "outbound") {
+			return <Mail className="h-4 w-4" />;
+		} else {
+			switch (message.message_type) {
+				case "acceptance":
+					return <CheckCircle className="h-4 w-4" />;
+				case "rejection":
+					return <XCircle className="h-4 w-4" />;
+				case "counter_offer":
+					return <MessageSquare className="h-4 w-4" />;
+				default:
+					return <MailOpen className="h-4 w-4" />;
+			}
+		}
+	};
+
+	const getMessageColor = (message: ConversationMessage) => {
+		if (message.direction === "outbound") {
+			return "text-blue-600 dark:text-blue-400";
+		} else {
+			switch (message.message_type) {
+				case "acceptance":
+					return "text-green-600 dark:text-green-400";
+				case "rejection":
+					return "text-red-600 dark:text-red-400";
+				case "counter_offer":
+					return "text-yellow-600 dark:text-yellow-400";
+				default:
+					return "text-gray-600 dark:text-gray-400";
+			}
+		}
+	};
+
+	const getSentimentIcon = (sentiment?: string) => {
+		switch (sentiment) {
+			case "positive":
+				return <TrendingUp className="h-3 w-3 text-green-500" />;
+			case "negative":
+				return <TrendingDown className="h-3 w-3 text-red-500" />;
+			default:
+				return null;
+		}
+	};
+
+	if (loading) {
+		return (
+			<Card>
+				<CardHeader>
+					<CardTitle className="flex items-center gap-2">
+						<Clock className="h-5 w-5 animate-spin" />
+						Loading Conversation...
+					</CardTitle>
+				</CardHeader>
+			</Card>
+		);
+	}
+
+	return (
+		<Card>
+			<CardHeader>
+				<CardTitle className="flex items-center justify-between">
+					<div className="flex items-center gap-2">
+						<MessageSquare className="h-5 w-5" />
+						Conversation Timeline
+					</div>
+					<div className="flex items-center gap-2">
+						<Badge variant="outline" className={statusColors[debt.status]}>
+							{statusLabels[debt.status]}
+						</Badge>
+						<span className="text-sm text-gray-500">
+							Round {debt.negotiation_round || 1}
+						</span>
+					</div>
+				</CardTitle>
+			</CardHeader>
+			<CardContent className="space-y-4">
+				{messages.length === 0 ? (
+					<div className="text-center py-8 text-gray-500 dark:text-gray-400">
+						<MessageSquare className="h-12 w-12 mx-auto mb-4 opacity-50" />
+						<p>No conversation messages yet</p>
+						<p className="text-sm">
+							Messages will appear here as the negotiation progresses
+						</p>
+					</div>
+				) : (
+					<div className="space-y-4">
+						{messages.map((message, index) => (
+							<div key={message.id} className="relative">
+								{/* Timeline line */}
+								{index < messages.length - 1 && (
+									<div className="absolute left-4 top-8 bottom-0 w-0.5 bg-gray-200 dark:bg-gray-700" />
+								)}
+
+								<div className="flex gap-4">
+									{/* Icon */}
+									<div
+										className={`
+                      flex items-center justify-center w-8 h-8 rounded-full border-2 bg-white dark:bg-gray-800
+                      ${getMessageColor(message)} border-current
+                    `}
+									>
+										{getMessageIcon(message)}
+									</div>
+
+									{/* Content */}
+									<div className="flex-1 min-w-0">
+										<div className="flex items-center justify-between mb-2">
+											<div className="flex items-center gap-2">
+												<h4 className="font-medium text-gray-900 dark:text-foreground">
+													{messageTypeLabels[message.message_type] ||
+														message.message_type}
+												</h4>
+												{message.ai_analysis?.sentiment &&
+													getSentimentIcon(message.ai_analysis.sentiment)}
+											</div>
+											<div className="flex items-center gap-2 text-sm text-gray-500 dark:text-gray-400">
+												<Calendar className="h-3 w-3" />
+												{formatDate(message.created_at)}
+											</div>
+										</div>
+
+										<div className="flex items-center gap-2 text-sm text-gray-600 dark:text-gray-300 mb-2">
+											{message.direction === "outbound" ? (
+												<>
+													<User className="h-3 w-3" />
+													<span>You → {message.to_email}</span>
+												</>
+											) : (
+												<>
+													<Building2 className="h-3 w-3" />
+													<span>{message.from_email} → You</span>
+												</>
+											)}
+										</div>
+
+										{message.subject && (
+											<p className="text-sm font-medium text-gray-800 dark:text-gray-200 mb-2">
+												Subject: {message.subject}
+											</p>
+										)}
+
+										<div className="bg-gray-50 dark:bg-gray-800 rounded-lg p-3 text-sm">
+											<p className="whitespace-pre-wrap text-gray-700 dark:text-gray-300">
+												{message.body.length > 200
+													? `${message.body.substring(0, 200)}...`
+													: message.body}
+											</p>
+										</div>
+
+										{/* AI Analysis */}
+										{message.ai_analysis && (
+											<div className="mt-2 space-y-2">
+												{message.ai_analysis.intent && (
+													<div className="flex items-center gap-2 my-2">
+														<Badge
+															variant={
+																message.ai_analysis.intent === "acceptance"
+																	? "default"
+																	: "secondary"
+															}
+															className={`text-xs ${
+																message.ai_analysis.intent === "acceptance"
+																	? "bg-green-600 text-white"
+																	: ""
+															}`}
+														>
+															Intent: {message.ai_analysis.intent}
+														</Badge>
+														{message.ai_analysis.confidence && (
+															<span className="text-xs text-gray-500">
+																{Math.round(
+																	message.ai_analysis.confidence * 100
+																)}
+																% confidence
+															</span>
+														)}
+													</div>
+												)}
+
+												{!!message.ai_analysis.extractedTerms
+													?.proposedAmount && (
+													<div className="text-xs text-gray-600 dark:text-gray-400">
+														Proposed Amount: $
+														{message.ai_analysis.extractedTerms.proposedAmount}
+													</div>
+												)}
+
+												{/* Show financial outcome for accepted offers */}
+												{message.ai_analysis.intent === "acceptance" &&
+													debt.metadata?.financialOutcome && (
+														<div className="bg-green-50 dark:bg-green-900/20 border border-green-200 dark:border-green-800 rounded-lg p-3 mt-2">
+															{debt.metadata.financialOutcome.financialBenefit
+																?.type === "principal_reduction" ? (
+																<>
+																	<div className="flex items-center gap-2 mb-2">
+																		<TrendingUp className="h-4 w-4 text-green-600" />
+																		<span className="font-medium text-green-800 dark:text-green-200">
+																			Principal Reduction Achieved
+																		</span>
+																	</div>
+																	<div className="grid grid-cols-2 gap-2 text-xs">
+																		<div>
+																			<span className="text-gray-600 dark:text-gray-400">
+																				Original Debt:
+																			</span>
+																			<div className="font-medium">
+																				$
+																				{
+																					debt.metadata.financialOutcome
+																						.originalAmount
+																				}
+																			</div>
+																		</div>
+																		<div>
+																			<span className="text-gray-600 dark:text-gray-400">
+																				Settlement Amount:
+																			</span>
+																			<div className="font-medium">
+																				$
+																				{
+																					debt.metadata.financialOutcome
+																						.acceptedAmount
+																				}
+																			</div>
+																		</div>
+																		<div>
+																			<span className="text-gray-600 dark:text-gray-400">
+																				Total Savings:
+																			</span>
+																			<div className="font-medium text-green-600">
+																				$
+																				{
+																					debt.metadata.financialOutcome
+																						.actualSavings
+																				}
+																			</div>
+																		</div>
+																		<div>
+																			<span className="text-gray-600 dark:text-gray-400">
+																				Reduction:
+																			</span>
+																			<div className="font-medium text-green-600">
+																				{
+																					debt.metadata.financialOutcome
+																						.financialBenefit.percentage
+																				}
+																				%
+																			</div>
+																		</div>
+																	</div>
+																</>
+															) : debt.metadata.financialOutcome
+																	.financialBenefit?.type ===
+															  "payment_restructuring" ? (
+																<>
+																	<div className="flex items-center gap-2 mb-2">
+																		<Calendar className="h-4 w-4 text-blue-600" />
+																		<span className="font-medium text-blue-800 dark:text-blue-200">
+																			Payment Plan Restructured
+																		</span>
+																	</div>
+																	<div className="space-y-2 text-xs">
+																		<div className="bg-blue-50 dark:bg-blue-900/30 rounded p-2">
+																			<div className="font-medium text-blue-800 dark:text-blue-200 mb-1">
+																				{
+																					debt.metadata.financialOutcome
+																						.financialBenefit.description
+																				}
+																			</div>
+																			{debt.metadata.financialOutcome
+																				.financialBenefit.cashFlowBenefit && (
+																				<div className="text-blue-600 dark:text-blue-300">
+																					💰{" "}
+																					{
+																						debt.metadata.financialOutcome
+																							.financialBenefit.cashFlowBenefit
+																					}
+																				</div>
+																			)}
+																		</div>
+																		{debt.metadata.financialOutcome
+																			.paymentStructure && (
+																			<div className="grid grid-cols-2 gap-2">
+																				<div>
+																					<span className="text-gray-600 dark:text-gray-400">
+																						Monthly Payment:
+																					</span>
+																					<div className="font-medium">
+																						$
+																						{
+																							debt.metadata.financialOutcome
+																								.paymentStructure.monthlyAmount
+																						}
+																					</div>
+																				</div>
+																				<div>
+																					<span className="text-gray-600 dark:text-gray-400">
+																						Term Length:
+																					</span>
+																					<div className="font-medium">
+																						{
+																							debt.metadata.financialOutcome
+																								.paymentStructure
+																								.numberOfPayments
+																						}{" "}
+																						months
+																					</div>
+																				</div>
+																				<div>
+																					<span className="text-gray-600 dark:text-gray-400">
+																						Total Amount:
+																					</span>
+																					<div className="font-medium">
+																						$
+																						{formatCurrency(
+																							debt.metadata.financialOutcome
+																								.paymentStructure.totalAmount
+																						)}
+																					</div>
+																				</div>
+																				<div>
+																					<span className="text-gray-600 dark:text-gray-400">
+																						Frequency:
+																					</span>
+																					<div className="font-medium capitalize">
+																						{
+																							debt.metadata.financialOutcome
+																								.paymentStructure.frequency
+																						}
+																					</div>
+																				</div>
+																			</div>
+																		)}
+																	</div>
+																</>
+															) : (
+																<>
+																	<div className="flex items-center gap-2 mb-2">
+																		<CheckCircle className="h-4 w-4 text-green-600" />
+																		<span className="font-medium text-green-800 dark:text-green-200">
+																			Offer Accepted
+																		</span>
+																	</div>
+																	<div className="text-xs text-gray-600 dark:text-gray-400">
+																		Settlement terms have been agreed upon.
+																	</div>
+																</>
+															)}
+														</div>
+													)}
+											</div>
+										)}
+									</div>
+								</div>
+							</div>
+						))}
+					</div>
+				)}
+
+				<Separator className="my-4" />
+
+				{/* Summary */}
+				<div className="bg-blue-50 dark:bg-blue-900/20 rounded-lg p-4">
+					<div className="flex items-center justify-between text-sm">
+						<div className="flex items-center gap-4">
+							<span className="text-gray-600 dark:text-gray-300">
+								Total Messages: {messages.length}
+							</span>
+							<span className="text-gray-600 dark:text-gray-300">
+								Negotiation Round: {debt.negotiation_round || 1}
+							</span>
+						</div>
+						{debt.last_message_at && (
+							<span className="text-gray-500 dark:text-gray-400">
+								Last Activity: {formatDate(debt.last_message_at)}
+							</span>
+						)}
+					</div>
+				</div>
+			</CardContent>
+		</Card>
+	);
+}

src/components/Dashboard.tsx

@@ -1,16 +1,10 @@
-import React, { useEffect, useState } from "react";
+import { useEffect, useState } from "react";
 import { supabase, type Debt, type UserProfile } from "../lib/supabase";
 import { Button } from "./ui/button";
 import { DebtCard } from "./DebtCard";
-import { DebtTimeline } from "./DebtTimeline";
+import { ConversationTimeline } from "./ConversationTimeline";
 import { OnboardingDialog } from "./OnboardingDialog";
-import {
+import { Card, CardContent, CardHeader, CardTitle } from "./ui/card";
-	Card,
-	CardContent,
-	CardDescription,
-	CardHeader,
-	CardTitle,
-} from "./ui/card";
 import { Tabs, TabsContent, TabsList, TabsTrigger } from "./ui/tabs";
 import { Badge } from "./ui/badge";
 import { Separator } from "./ui/separator";
@@ -21,10 +15,9 @@ import {
 	CheckCircle,
 	AlertTriangle,
 	RefreshCw,
-	BarChart3,
-	LogOut,
 	Settings,
 } from "lucide-react";
+import { formatCurrency } from "../lib/utils";
 
 export function Dashboard() {
 	const [debts, setDebts] = useState<Debt[]>([]);
@@ -130,10 +123,13 @@ export function Dashboard() {
 	const calculateStats = () => {
 		const totalDebts = debts.length;
 		const totalAmount = debts.reduce((sum, debt) => sum + debt.amount, 0);
-		const projectedSavings = debts.reduce(
+		const projectedSavings = debts.reduce((sum, debt) => {
-			(sum, debt) => sum + debt.projected_savings,
+			// Use actual savings for accepted debts, projected for others
-			0
+			if (debt.status === "accepted" && debt.metadata?.actualSavings?.amount) {
-		);
+				return sum + debt.metadata.actualSavings.amount;
+			}
+			return sum + debt.projected_savings;
+		}, 0);
 		const settledCount = debts.filter(
 			(debt) => debt.status === "settled"
 		).length;
@@ -157,23 +153,22 @@ export function Dashboard() {
 		window.location.href = "/";
 	};
 
-	const formatCurrency = (amount: number) => {
-		return new Intl.NumberFormat("en-US", {
-			style: "currency",
-			currency: "USD",
-		}).format(amount);
-	};
-
 	const groupedDebts = {
 		all: debts,
 		active: debts.filter((debt) =>
-			["received", "negotiating"].includes(debt.status)
+			[
+				"received",
+				"negotiating",
+				"approved",
+				"awaiting_response",
+				"counter_negotiating",
+			].includes(debt.status)
 		),
 		settled: debts.filter((debt) =>
-			["settled", "approved", "sent"].includes(debt.status)
+			["settled", "accepted", "sent"].includes(debt.status)
 		),
 		failed: debts.filter((debt) =>
-			["failed", "opted_out"].includes(debt.status)
+			["failed", "rejected", "opted_out"].includes(debt.status)
 		),
 	};
 
@@ -318,11 +313,14 @@ export function Dashboard() {
 									{debtList.map((debt) => (
 										<div key={debt.id} className="space-y-4">
 											<DebtCard debt={debt} onUpdate={fetchDebts} />
-											<Card className="bg-gray-50 dark:bg-gray-800/50">
+											<ConversationTimeline
-												<CardContent className="p-4">
+												debt={debt}
-													<DebtTimeline debt={debt} />
+												onDebtUpdate={(debt) => {
-												</CardContent>
+													setDebts(
-											</Card>
+														debts.map((d) => (d.id === debt.id ? debt : d))
+													);
+												}}
+											/>
 										</div>
 									))}
 								</div>

src/components/DebtCard.tsx

@@ -13,6 +13,7 @@ import { Textarea } from "./ui/textarea";
 import { Label } from "./ui/label";
 import {
 	Dialog,
+	DialogClose,
 	DialogContent,
 	DialogDescription,
 	DialogHeader,
@@ -45,6 +46,7 @@ import {
 } from "lucide-react";
 import { supabase, type Debt, type DebtVariable } from "../lib/supabase";
 import { toast } from "sonner";
+import { formatCurrency } from "../lib/utils";
 
 interface DebtCardProps {
 	debt: Debt;
@@ -59,6 +61,14 @@ const statusColors = {
 	approved:
 		"bg-teal-100 text-teal-800 border-teal-200 dark:bg-teal-900/20 dark:text-teal-300 dark:border-teal-800",
 	sent: "bg-purple-100 text-purple-800 border-purple-200 dark:bg-purple-900/20 dark:text-purple-300 dark:border-purple-800",
+	awaiting_response:
+		"bg-blue-100 text-blue-800 border-blue-200 dark:bg-blue-900/20 dark:text-blue-300 dark:border-blue-800",
+	counter_negotiating:
+		"bg-yellow-100 text-yellow-800 border-yellow-200 dark:bg-yellow-900/20 dark:text-yellow-300 dark:border-yellow-800",
+	accepted:
+		"bg-green-100 text-green-800 border-green-200 dark:bg-green-900/20 dark:text-green-300 dark:border-green-800",
+	rejected:
+		"bg-red-100 text-red-800 border-red-200 dark:bg-red-900/20 dark:text-red-300 dark:border-red-800",
 	settled:
 		"bg-green-100 text-green-800 border-green-200 dark:bg-green-900/20 dark:text-green-300 dark:border-green-800",
 	failed:
@@ -72,6 +82,10 @@ const statusLabels = {
 	negotiating: "Negotiating",
 	approved: "Approved",
 	sent: "Sent",
+	awaiting_response: "Awaiting Response",
+	counter_negotiating: "Counter Negotiating",
+	accepted: "Accepted",
+	rejected: "Rejected",
 	settled: "Settled",
 	failed: "Failed",
 	opted_out: "Opted Out",
@@ -81,21 +95,20 @@ export function DebtCard({ debt, onUpdate }: DebtCardProps) {
 	const [isApproving, setIsApproving] = useState(false);
 	const [isRejecting, setIsRejecting] = useState(false);
 	const [userProfile, setUserProfile] = useState<any>(null);
-	const [hasServerToken, setHasServerToken] = useState(false);
+	const [hasServerToken, setHasServerToken] = useState<boolean | undefined>(
+		undefined
+	);
 
 	const isReadOnly =
 		debt.status === "approved" ||
 		debt.status === "sent" ||
+		debt.status === "awaiting_response" ||
+		debt.status === "accepted" ||
+		debt.status === "rejected" ||
+		debt.status === "settled" ||
 		debt.status === "failed" ||
 		debt.status === "opted_out";
 
-	const formatCurrency = (amount: number) => {
-		return new Intl.NumberFormat("en-US", {
-			style: "currency",
-			currency: "USD",
-		}).format(amount);
-	};
-
 	const formatDate = (dateString: string) => {
 		return new Date(dateString).toLocaleDateString("en-US", {
 			year: "numeric",
@@ -466,9 +479,11 @@ export function DebtCard({ debt, onUpdate }: DebtCardProps) {
 						{/* Action Buttons */}
 						{!isReadOnly && (
 							<div className="flex justify-end gap-2 border-t pt-4">
-								<Button variant="outline" onClick={() => setIsEditing(false)}>
+								<DialogClose>
-									Cancel
+									<Button variant="outline" onClick={() => setIsEditing(false)}>
-								</Button>
+										Cancel
+									</Button>
+								</DialogClose>
 								<Button onClick={handleSave} disabled={isSaving}>
 									{isSaving ? "Saving..." : "Save Changes"}
 								</Button>
@@ -663,8 +678,8 @@ export function DebtCard({ debt, onUpdate }: DebtCardProps) {
 
 			<CardContent className="space-y-4">
 				<div className="flex items-center justify-between">
-					<div className="flex items-center gap-2">
+					<div className="flex items-center gap-0.5">
-						<DollarSign className="h-5 w-5 text-gray-500 dark:text-gray-400" />
+						<DollarSign className="h-5 w-5 text-gray-500 dark:text-gray-400 my-auto" />
 						<span className="text-2xl font-bold text-gray-900 dark:text-foreground">
 							{formatCurrency(debt.amount)}
 						</span>
@@ -710,7 +725,7 @@ export function DebtCard({ debt, onUpdate }: DebtCardProps) {
 					{/* Approve/Reject Buttons */}
 					{showApproveRejectButtons() && (
 						<div className="space-y-2">
-							{!hasServerToken && (
+							{hasServerToken === false && (
 								<div className="flex items-center gap-2 p-3 bg-amber-50 dark:bg-amber-900/20 border border-amber-200 dark:border-amber-800 rounded-lg">
 									<AlertCircle className="h-4 w-4 text-amber-600 dark:text-amber-400" />
 									<span className="text-sm text-amber-700 dark:text-amber-300 flex-1">
@@ -721,7 +736,7 @@ export function DebtCard({ debt, onUpdate }: DebtCardProps) {
 										variant="outline"
 										size="sm"
 										onClick={() => (window.location.href = "/configuration")}
-										className="text-amber-700 border-amber-300 hover:bg-amber-100"
+										className="text-amber-700 dark:text-amber-500 border-amber-300"
 									>
 										<ExternalLink className="h-3 w-3 mr-1" />
 										Settings
@@ -757,7 +772,7 @@ export function DebtCard({ debt, onUpdate }: DebtCardProps) {
 											<AlertDialogCancel>Cancel</AlertDialogCancel>
 											<AlertDialogAction
 												onClick={() => handleApprove()}
-												className="bg-green-600 hover:bg-green-700"
+												className="bg-green-600 hover:bg-green-700 text-white"
 											>
 												Send Email
 											</AlertDialogAction>

src/components/DebtTimeline.tsx

@@ -1,26 +1,83 @@
-import React from "react";
+import React, { useState, useEffect } from "react";
 import {
 	CheckCircle,
 	Clock,
 	AlertCircle,
 	XCircle,
 	StopCircle,
+	Send,
+	MessageSquare,
+	ThumbsUp,
+	ThumbsDown,
+	RefreshCw,
 } from "lucide-react";
 import type { Debt } from "../lib/supabase";
+import { createClient } from "@supabase/supabase-js";
 
 interface DebtTimelineProps {
 	debt: Debt;
 }
 
-const timelineSteps = [
+interface ConversationMessage {
-	{ key: "received", label: "Email Received", icon: CheckCircle },
+	id: string;
-	{ key: "negotiating", label: "Negotiating", icon: Clock },
+	message_type: string;
-	{ key: "settled", label: "Settled", icon: CheckCircle },
+	direction: "inbound" | "outbound";
-];
+	subject: string;
+	body: string;
+	from_email: string;
+	to_email: string;
+	ai_analysis?: any;
+	created_at: string;
+}
+
+const getTimelineSteps = (debt: Debt) => {
+	const baseSteps = [
+		{ key: "received", label: "Debt Email Received", icon: MessageSquare },
+		{ key: "negotiating", label: "AI Response Generated", icon: Clock },
+		{ key: "approved", label: "Response Approved", icon: CheckCircle },
+		{ key: "sent", label: "Negotiation Email Sent", icon: Send },
+	];
+
+	// Add dynamic steps based on conversation
+	if (debt.status === "counter_negotiating" || debt.negotiation_round > 1) {
+		baseSteps.push({
+			key: "counter_negotiating",
+			label: "Counter-Negotiating",
+			icon: RefreshCw,
+		});
+	}
+
+	if (debt.status === "accepted" || debt.status === "settled") {
+		baseSteps.push({
+			key: "accepted",
+			label: "Offer Accepted",
+			icon: ThumbsUp,
+		});
+		baseSteps.push({
+			key: "settled",
+			label: "Debt Settled",
+			icon: CheckCircle,
+		});
+	} else if (debt.status === "rejected") {
+		baseSteps.push({
+			key: "rejected",
+			label: "Offer Rejected",
+			icon: ThumbsDown,
+		});
+	}
+
+	return baseSteps;
+};
 
 const statusIcons = {
-	received: CheckCircle,
+	received: MessageSquare,
 	negotiating: Clock,
+	approved: CheckCircle,
+	sent: Send,
+	awaiting_response: Clock,
+	counter_negotiating: RefreshCw,
+	accepted: ThumbsUp,
+	rejected: ThumbsDown,
 	settled: CheckCircle,
 	failed: XCircle,
 	opted_out: StopCircle,
@@ -29,20 +86,139 @@ const statusIcons = {
 const statusColors = {
 	received: "text-blue-600 dark:text-blue-400",
 	negotiating: "text-yellow-600 dark:text-yellow-400",
+	approved: "text-green-600 dark:text-green-400",
+	sent: "text-purple-600 dark:text-purple-400",
+	awaiting_response: "text-orange-600 dark:text-orange-400",
+	counter_negotiating: "text-indigo-600 dark:text-indigo-400",
+	accepted: "text-green-600 dark:text-green-400",
+	rejected: "text-red-600 dark:text-red-400",
 	settled: "text-green-600 dark:text-green-400",
 	failed: "text-red-600 dark:text-red-400",
 	opted_out: "text-gray-600 dark:text-gray-400",
 };
 
 export function DebtTimeline({ debt }: DebtTimelineProps) {
+	const [conversationMessages, setConversationMessages] = useState<
+		ConversationMessage[]
+	>([]);
+	const [loading, setLoading] = useState(true);
+
+	useEffect(() => {
+		const fetchConversationMessages = async () => {
+			try {
+				const supabase = createClient(
+					import.meta.env.PUBLIC_SUPABASE_URL,
+					import.meta.env.PUBLIC_SUPABASE_ANON_KEY
+				);
+
+				const { data, error } = await supabase
+					.from("conversation_messages")
+					.select("*")
+					.eq("debt_id", debt.id)
+					.order("created_at", { ascending: true });
+
+				if (error) {
+					console.error("Error fetching conversation messages:", error);
+				} else {
+					setConversationMessages(data || []);
+				}
+			} catch (error) {
+				console.error("Error:", error);
+			} finally {
+				setLoading(false);
+			}
+		};
+
+		fetchConversationMessages();
+	}, [debt.id]);
+
+	const timelineSteps = getTimelineSteps(debt);
 	const currentStepIndex = timelineSteps.findIndex(
 		(step) => step.key === debt.status
 	);
 
-	return (
+	const formatDateTime = (dateString: string) => {
-		<div className="space-y-4">
+		const date = new Date(dateString);
-			<h3 className="text-lg font-semibold">Progress Timeline</h3>
+		return {
+			date: date.toLocaleDateString(),
+			time: date.toLocaleTimeString([], { hour: "2-digit", minute: "2-digit" }),
+		};
+	};
 
+	const getStatusDescription = (status: string, round?: number) => {
+		switch (status) {
+			case "received":
+				return "Debt collection email received and parsed";
+			case "negotiating":
+				return "AI analyzing debt and generating negotiation strategy";
+			case "approved":
+				return "Negotiation response approved and ready to send";
+			case "sent":
+				return "Negotiation email sent to creditor";
+			case "awaiting_response":
+				return "Waiting for creditor's response";
+			case "counter_negotiating":
+				return `Round ${round || 1} - Analyzing creditor's counter-offer`;
+			case "accepted":
+				return "Creditor accepted the negotiation terms";
+			case "rejected":
+				return "Creditor rejected the offer - manual review needed";
+			case "settled":
+				return "Debt successfully settled with agreed terms";
+			case "failed":
+				return "Negotiation failed - escalated for manual handling";
+			default:
+				return "Processing...";
+		}
+	};
+
+	return (
+		<div className="space-y-6">
+			<div className="flex items-center justify-between">
+				<h3 className="text-lg font-semibold">Negotiation Timeline</h3>
+				<div className="text-sm text-gray-500 dark:text-gray-400">
+					Round {debt.negotiation_round || 1} • {debt.conversation_count || 0}{" "}
+					messages
+				</div>
+			</div>
+
+			{/* Current Status Overview */}
+			<div className="bg-gray-50 dark:bg-gray-800 rounded-lg p-4">
+				<div className="flex items-center gap-3">
+					<div
+						className={`p-2 rounded-full ${statusColors[
+							debt.status as keyof typeof statusColors
+						]
+							?.replace("text-", "bg-")
+							.replace("dark:text-", "dark:bg-")} bg-opacity-20`}
+					>
+						{React.createElement(
+							statusIcons[debt.status as keyof typeof statusIcons] || Clock,
+							{
+								className: `h-5 w-5 ${
+									statusColors[debt.status as keyof typeof statusColors]
+								}`,
+							}
+						)}
+					</div>
+					<div>
+						<div className="font-medium capitalize">
+							{debt.status.replace("_", " ")}
+						</div>
+						<div className="text-sm text-gray-600 dark:text-gray-300">
+							{getStatusDescription(debt.status, debt.negotiation_round)}
+						</div>
+						{debt.last_message_at && (
+							<div className="text-xs text-gray-500 dark:text-gray-400 mt-1">
+								Last updated: {formatDateTime(debt.last_message_at).date} at{" "}
+								{formatDateTime(debt.last_message_at).time}
+							</div>
+						)}
+					</div>
+				</div>
+			</div>
+
+			{/* Timeline Steps */}
 			<div className="space-y-4">
 				{timelineSteps.map((step, index) => {
 					const isCompleted = index <= currentStepIndex;
@@ -50,90 +226,138 @@ export function DebtTimeline({ debt }: DebtTimelineProps) {
 					const Icon = step.icon;
 
 					return (
-						<div key={step.key} className="flex items-center gap-3">
+						<div key={step.key} className="flex items-start gap-3">
 							<div
 								className={`
-                flex items-center justify-center w-8 h-8 rounded-full border-2
+                  flex items-center justify-center w-8 h-8 rounded-full border-2 mt-1
-                ${
+                  ${
-									isCompleted
+										isCompleted
-										? "bg-primary border-primary text-white"
+											? "bg-primary border-primary text-white"
-										: "border-gray-300 dark:border-gray-600 text-gray-300 dark:text-gray-600"
+											: "border-gray-300 dark:border-gray-600 text-gray-300 dark:text-gray-600"
-								}
+									}
-                ${isActive ? "ring-2 ring-primary/20" : ""}
+                  ${isActive ? "ring-2 ring-primary/20" : ""}
-              `}
+                `}
 							>
 								<Icon className="h-4 w-4" />
 							</div>
 
-							<div className="flex-1">
+							<div className="flex-1 min-w-0">
 								<div
 									className={`
-                  font-medium
+                    font-medium
-                  ${
+                    ${
-										isCompleted
+											isCompleted
-											? "text-gray-900 dark:text-foreground"
+												? "text-gray-900 dark:text-foreground"
-											: "text-gray-400 dark:text-gray-500"
+												: "text-gray-400 dark:text-gray-500"
-									}
+										}
-                `}
+                  `}
 								>
 									{step.label}
 								</div>
 
 								{isActive && (
 									<div className="text-sm text-gray-600 dark:text-gray-300 mt-1">
-										{debt.status === "received" &&
+										{getStatusDescription(debt.status, debt.negotiation_round)}
-											"Processing email and generating response..."}
-										{debt.status === "negotiating" &&
-											"Response generated, waiting for creditor reply"}
-										{debt.status === "settled" && "Payment plan agreed upon"}
 									</div>
 								)}
 							</div>
 
-							{isActive && (
+							{isCompleted && debt.updated_at && (
-								<div className="text-sm text-gray-500 dark:text-gray-400">
+								<div className="text-xs text-gray-500 dark:text-gray-400 text-right">
-									{new Date(debt.updated_at).toLocaleDateString()}
+									<div>{formatDateTime(debt.updated_at).date}</div>
+									<div>{formatDateTime(debt.updated_at).time}</div>
 								</div>
 							)}
 						</div>
 					);
 				})}
-
-				{/* Special cases for failed and opted_out */}
-				{(debt.status === "failed" || debt.status === "opted_out") && (
-					<div className="flex items-center gap-3">
-						<div
-							className={`
-              flex items-center justify-center w-8 h-8 rounded-full border-2
-              ${
-								debt.status === "failed"
-									? "border-red-500 text-red-500 dark:border-red-400 dark:text-red-400"
-									: "border-gray-500 text-gray-500 dark:border-gray-400 dark:text-gray-400"
-							}
-            `}
-						>
-							{React.createElement(statusIcons[debt.status], {
-								className: "h-4 w-4",
-							})}
-						</div>
-
-						<div className="flex-1">
-							<div className={`font-medium ${statusColors[debt.status]}`}>
-								{debt.status === "failed" ? "Negotiation Failed" : "Opted Out"}
-							</div>
-							<div className="text-sm text-gray-600 dark:text-gray-300 mt-1">
-								{debt.status === "failed"
-									? "Creditor declined the negotiation proposal"
-									: "User requested to stop communication"}
-							</div>
-						</div>
-
-						<div className="text-sm text-gray-500 dark:text-gray-400">
-							{new Date(debt.updated_at).toLocaleDateString()}
-						</div>
-					</div>
-				)}
 			</div>
+
+			{/* Conversation Messages */}
+			{!loading && conversationMessages.length > 0 && (
+				<div className="space-y-4">
+					<h4 className="text-md font-medium text-gray-700 dark:text-gray-300">
+						Conversation History
+					</h4>
+					<div className="space-y-3">
+						{conversationMessages.map((message) => {
+							const isOutbound = message.direction === "outbound";
+							const datetime = formatDateTime(message.created_at);
+
+							return (
+								<div
+									key={message.id}
+									className={`flex ${
+										isOutbound ? "justify-end" : "justify-start"
+									}`}
+								>
+									<div
+										className={`max-w-xs lg:max-w-md px-4 py-2 rounded-lg ${
+											isOutbound
+												? "bg-primary text-white"
+												: "bg-gray-100 dark:bg-gray-700 text-gray-900 dark:text-gray-100"
+										}`}
+									>
+										<div className="text-xs opacity-75 mb-1">
+											{isOutbound ? "You" : "Creditor"} • {datetime.date}{" "}
+											{datetime.time}
+										</div>
+										<div className="text-sm font-medium mb-1">
+											{message.subject}
+										</div>
+										<div className="text-sm opacity-90">
+											{message.body.length > 100
+												? `${message.body.substring(0, 100)}...`
+												: message.body}
+										</div>
+										{message.ai_analysis && (
+											<div className="text-xs mt-2 opacity-75">
+												AI: {message.ai_analysis.intent || "Analyzed"}
+												{message.ai_analysis.confidence &&
+													` (${Math.round(
+														message.ai_analysis.confidence * 100
+													)}% confidence)`}
+											</div>
+										)}
+									</div>
+								</div>
+							);
+						})}
+					</div>
+				</div>
+			)}
+
+			{/* Savings Summary */}
+			{(debt.projected_savings > 0 ||
+				(debt.actual_savings && debt.actual_savings > 0)) && (
+				<div className="bg-green-50 dark:bg-green-900/20 rounded-lg p-4">
+					<h4 className="text-md font-medium text-green-800 dark:text-green-200 mb-2">
+						Savings Summary
+					</h4>
+					<div className="grid grid-cols-2 gap-4 text-sm">
+						{debt.projected_savings > 0 && (
+							<div>
+								<div className="text-green-600 dark:text-green-400 font-medium">
+									Projected Savings
+								</div>
+								<div className="text-green-800 dark:text-green-200">
+									${debt.projected_savings.toFixed(2)}
+								</div>
+							</div>
+						)}
+						{debt.actual_savings && debt.actual_savings > 0 && (
+							<div>
+								<div className="text-green-600 dark:text-green-400 font-medium">
+									Actual Savings
+								</div>
+								<div className="text-green-800 dark:text-green-200">
+									${debt.actual_savings.toFixed(2)}
+								</div>
+							</div>
+						)}
+					</div>
+				</div>
+			)}
 		</div>
 	);
 }

src/components/ExtractionTester.tsx

@@ -0,0 +1,212 @@
+import { useState } from "react";
+import { Button } from "./ui/button";
+import { Textarea } from "./ui/textarea";
+import { Card, CardContent, CardHeader, CardTitle } from "./ui/card";
+import { Badge } from "./ui/badge";
+import { toast } from "sonner";
+import { TestTube, Loader2 } from "lucide-react";
+
+export function ExtractionTester() {
+  const [testEmail, setTestEmail] = useState(`Thank you for your payment arrangement request. We are pleased to offer you a structured payment plan. We can accept $250 per month for 18 months, totaling $4,500. This arrangement will allow you to resolve this matter with manageable monthly payments.`);
+  const [result, setResult] = useState<any>(null);
+  const [isLoading, setIsLoading] = useState(false);
+
+  const testExtraction = async () => {
+    setIsLoading(true);
+    try {
+      const response = await fetch('/api/supabase/functions/test-extraction', {
+        method: 'POST',
+        headers: {
+          'Content-Type': 'application/json',
+        },
+        body: JSON.stringify({ testEmail }),
+      });
+
+      if (!response.ok) {
+        throw new Error(`HTTP error! status: ${response.status}`);
+      }
+
+      const data = await response.json();
+      setResult(data);
+      
+      if (data.success) {
+        toast.success("Extraction Test Complete", {
+          description: `Found ${Object.keys(data.extractedTerms || {}).length} extracted terms`,
+        });
+      } else {
+        toast.error("Extraction Test Failed", {
+          description: data.error || "Unknown error",
+        });
+      }
+    } catch (error) {
+      console.error("Error testing extraction:", error);
+      toast.error("Test Failed", {
+        description: "Failed to test extraction",
+      });
+    } finally {
+      setIsLoading(false);
+    }
+  };
+
+  const presetEmails = [
+    {
+      name: "Payment Plan",
+      content: "Thank you for your payment arrangement request. We are pleased to offer you a structured payment plan. We can accept $250 per month for 18 months, totaling $4,500. This arrangement will allow you to resolve this matter with manageable monthly payments."
+    },
+    {
+      name: "Settlement Offer",
+      content: "We are pleased to accept your proposed settlement offer of $3,200. We will process the settlement as discussed and consider this matter resolved upon receipt of payment."
+    },
+    {
+      name: "Counter Offer",
+      content: "Thank you for your proposal. However, we can only accept a settlement of $4,000 or a payment plan of $300 per month for 15 months. Please let us know which option works better for you."
+    },
+    {
+      name: "Rejection",
+      content: "Thank you for your payment proposal. Unfortunately, we cannot accept the terms you have proposed. We require the full amount of $5,000 to be paid within 30 days."
+    }
+  ];
+
+  return (
+    <Card className="w-full max-w-4xl mx-auto">
+      <CardHeader>
+        <CardTitle className="flex items-center gap-2">
+          <TestTube className="h-5 w-5" />
+          AI Extraction Tester
+        </CardTitle>
+      </CardHeader>
+      <CardContent className="space-y-4">
+        {/* Preset Emails */}
+        <div>
+          <label className="text-sm font-medium mb-2 block">Preset Test Emails:</label>
+          <div className="flex flex-wrap gap-2">
+            {presetEmails.map((preset) => (
+              <Button
+                key={preset.name}
+                variant="outline"
+                size="sm"
+                onClick={() => setTestEmail(preset.content)}
+              >
+                {preset.name}
+              </Button>
+            ))}
+          </div>
+        </div>
+
+        {/* Email Input */}
+        <div>
+          <label className="text-sm font-medium mb-2 block">Test Email Content:</label>
+          <Textarea
+            value={testEmail}
+            onChange={(e) => setTestEmail(e.target.value)}
+            placeholder="Enter email content to test extraction..."
+            rows={4}
+            className="w-full"
+          />
+        </div>
+
+        {/* Test Button */}
+        <Button 
+          onClick={testExtraction} 
+          disabled={isLoading || !testEmail.trim()}
+          className="w-full"
+        >
+          {isLoading ? (
+            <>
+              <Loader2 className="h-4 w-4 mr-2 animate-spin" />
+              Testing Extraction...
+            </>
+          ) : (
+            <>
+              <TestTube className="h-4 w-4 mr-2" />
+              Test AI Extraction
+            </>
+          )}
+        </Button>
+
+        {/* Results */}
+        {result && (
+          <div className="space-y-4">
+            <div className="border-t pt-4">
+              <h3 className="font-medium mb-2">Extraction Results:</h3>
+              
+              {/* Intent & Confidence */}
+              <div className="flex items-center gap-2 mb-3">
+                <Badge variant={result.analysis?.intent === "acceptance" ? "default" : "secondary"}>
+                  Intent: {result.analysis?.intent}
+                </Badge>
+                <Badge variant="outline">
+                  Confidence: {Math.round((result.analysis?.confidence || 0) * 100)}%
+                </Badge>
+                <Badge variant="outline">
+                  Sentiment: {result.analysis?.sentiment}
+                </Badge>
+              </div>
+
+              {/* Extracted Terms */}
+              <div className="bg-gray-50 dark:bg-gray-800 rounded-lg p-4">
+                <h4 className="font-medium mb-2">Extracted Terms:</h4>
+                <pre className="text-sm overflow-auto">
+                  {JSON.stringify(result.extractedTerms, null, 2)}
+                </pre>
+              </div>
+
+              {/* Payment Terms Detail */}
+              {result.extractedTerms?.paymentTerms && (
+                <div className="bg-blue-50 dark:bg-blue-900/20 rounded-lg p-4">
+                  <h4 className="font-medium mb-2">Payment Plan Details:</h4>
+                  <div className="grid grid-cols-2 gap-2 text-sm">
+                    {result.extractedTerms.paymentTerms.monthlyAmount && (
+                      <div>
+                        <span className="text-gray-600 dark:text-gray-400">Monthly:</span>
+                        <div className="font-medium">${result.extractedTerms.paymentTerms.monthlyAmount}</div>
+                      </div>
+                    )}
+                    {result.extractedTerms.paymentTerms.numberOfPayments && (
+                      <div>
+                        <span className="text-gray-600 dark:text-gray-400">Payments:</span>
+                        <div className="font-medium">{result.extractedTerms.paymentTerms.numberOfPayments}</div>
+                      </div>
+                    )}
+                    {result.extractedTerms.paymentTerms.totalAmount && (
+                      <div>
+                        <span className="text-gray-600 dark:text-gray-400">Total:</span>
+                        <div className="font-medium">${result.extractedTerms.paymentTerms.totalAmount}</div>
+                      </div>
+                    )}
+                    {result.extractedTerms.paymentTerms.paymentFrequency && (
+                      <div>
+                        <span className="text-gray-600 dark:text-gray-400">Frequency:</span>
+                        <div className="font-medium">{result.extractedTerms.paymentTerms.paymentFrequency}</div>
+                      </div>
+                    )}
+                  </div>
+                </div>
+              )}
+
+              {/* Proposed Amount */}
+              {result.extractedTerms?.proposedAmount && (
+                <div className="bg-green-50 dark:bg-green-900/20 rounded-lg p-4">
+                  <h4 className="font-medium mb-2">Settlement Amount:</h4>
+                  <div className="text-lg font-bold text-green-600">
+                    ${result.extractedTerms.proposedAmount}
+                  </div>
+                </div>
+              )}
+
+              {/* Reasoning */}
+              {result.analysis?.reasoning && (
+                <div className="bg-gray-50 dark:bg-gray-800 rounded-lg p-4">
+                  <h4 className="font-medium mb-2">AI Reasoning:</h4>
+                  <p className="text-sm text-gray-600 dark:text-gray-300">
+                    {result.analysis.reasoning}
+                  </p>
+                </div>
+              )}
+            </div>
+          </div>
+        )}
+      </CardContent>
+    </Card>
+  );
+}

src/components/RealtimeTestButton.tsx

@@ -0,0 +1,121 @@
+import { useState } from "react";
+import { supabase } from "../lib/supabase";
+import { Button } from "./ui/button";
+import { toast } from "sonner";
+import { MessageSquare } from "lucide-react";
+
+interface RealtimeTestButtonProps {
+  debtId: string;
+}
+
+export function RealtimeTestButton({ debtId }: RealtimeTestButtonProps) {
+  const [isSimulating, setIsSimulating] = useState(false);
+
+  const simulateIncomingMessage = async () => {
+    setIsSimulating(true);
+    try {
+      // Randomly choose between principal reduction and payment restructuring
+      const isPaymentPlan = Math.random() > 0.5;
+      
+      const testMessage = isPaymentPlan ? {
+        // Payment restructuring scenario
+        debt_id: debtId,
+        message_type: "acceptance",
+        direction: "inbound",
+        subject: "Re: Payment Arrangement Request - Payment Plan Approved",
+        body: "Thank you for your payment arrangement request. We are pleased to offer you a structured payment plan. We can accept $250 per month for 18 months, totaling $4,500. This arrangement will allow you to resolve this matter with manageable monthly payments while providing you with extended terms.",
+        from_email: "collections@testcreditor.com",
+        to_email: "user@example.com",
+        ai_analysis: {
+          intent: "acceptance",
+          sentiment: "positive",
+          confidence: 0.92,
+          extractedTerms: {
+            proposedAmount: 4500,
+            proposedPaymentPlan: "monthly payment plan",
+            paymentTerms: {
+              monthlyAmount: 250,
+              numberOfPayments: 18,
+              totalAmount: 4500,
+              paymentFrequency: "monthly",
+              interestRate: 0
+            },
+            deadline: null,
+            conditions: [
+              "structured payment plan",
+              "manageable monthly payments",
+              "extended terms"
+            ],
+          },
+          reasoning: "Creditor has accepted a payment restructuring plan with extended terms",
+          suggestedNextAction: "mark_settled",
+          requiresUserReview: false,
+        },
+      } : {
+        // Principal reduction scenario
+        debt_id: debtId,
+        message_type: "acceptance",
+        direction: "inbound",
+        subject: "Re: Payment Arrangement Request - Settlement Accepted",
+        body: "Thank you for your payment arrangement request. We are pleased to accept your proposed settlement offer of $3,200. We will process the settlement as discussed and consider this matter resolved upon receipt of payment.",
+        from_email: "collections@testcreditor.com",
+        to_email: "user@example.com",
+        ai_analysis: {
+          intent: "acceptance",
+          sentiment: "positive",
+          confidence: 0.95,
+          extractedTerms: {
+            proposedAmount: 3200,
+            proposedPaymentPlan: "lump sum settlement",
+            deadline: null,
+            conditions: [
+              "settlement accepted",
+              "matter resolved upon payment",
+            ],
+          },
+          reasoning: "Creditor has accepted the proposed settlement offer with principal reduction",
+          suggestedNextAction: "mark_settled",
+          requiresUserReview: false,
+        },
+      };
+
+      const { error } = await supabase
+        .from("conversation_messages")
+        .insert(testMessage);
+
+      if (error) {
+        throw error;
+      }
+
+      toast.success(
+        isPaymentPlan ? "🏦 Payment Plan Simulated" : "🎉 Settlement Simulated",
+        {
+          description: isPaymentPlan 
+            ? "A payment restructuring scenario has been simulated"
+            : "A principal reduction scenario has been simulated",
+        }
+      );
+
+    } catch (error) {
+      console.error("Error simulating message:", error);
+      toast.error("Simulation Failed", {
+        description: "Failed to simulate incoming message",
+      });
+    } finally {
+      setIsSimulating(false);
+    }
+  };
+
+  return (
+    <Button
+      variant="outline"
+      size="sm"
+      onClick={simulateIncomingMessage}
+      disabled={isSimulating}
+      className="flex items-center gap-2"
+    >
+      <MessageSquare className="h-4 w-4" />
+      {isSimulating ? "Simulating..." : "Test Real-time"}
+    </Button>
+  );
+}

src/lib/supabase.ts

@@ -27,6 +27,10 @@ export type Debt = {
     | "negotiating"
     | "approved"
     | "sent"
+    | "awaiting_response"
+    | "counter_negotiating"
+    | "accepted"
+    | "rejected"
     | "settled"
     | "failed"
     | "opted_out";
@@ -35,6 +39,11 @@ export type Debt = {
   user_id: string;
   description?: string | null;
   due_date?: string | null;
+  conversation_count?: number;
+  last_message_at?: string;
+  negotiation_round?: number;
+  prospected_savings?: number;
+  actual_savings?: number;
   metadata?: Record<string, any> | null;
 };
 
@@ -84,3 +93,24 @@ export type DebtVariable = {
   created_at: string;
   updated_at: string;
 };
+
+export type ConversationMessage = {
+  id: string;
+  debt_id: string;
+  message_type:
+    | "initial_debt"
+    | "negotiation_sent"
+    | "response_received"
+    | "counter_offer"
+    | "acceptance"
+    | "rejection";
+  direction: "inbound" | "outbound";
+  subject?: string;
+  body: string;
+  from_email?: string;
+  to_email?: string;
+  message_id?: string;
+  ai_analysis?: Record<string, any>;
+  created_at: string;
+  updated_at: string;
+};

src/lib/utils.ts

@@ -1,6 +1,13 @@
-import { clsx, type ClassValue } from 'clsx';
+import { type ClassValue, clsx } from "clsx";
-import { twMerge } from 'tailwind-merge';
+import { twMerge } from "tailwind-merge";
 
 export function cn(...inputs: ClassValue[]) {
   return twMerge(clsx(inputs));
 }
+
+export const formatCurrency = (amount: number) => {
+  return new Intl.NumberFormat("en-US", {
+    style: "currency",
+    currency: "USD",
+  }).format(amount).split("$")[1];
+};

src/pages/api/postmark.ts

@@ -141,6 +141,171 @@ async function incrementEmailUsage(
 	}
 }
 
+// Check if incoming email is a response to existing negotiation
+async function checkForExistingNegotiation(
+	fromEmail: string,
+	toEmail: string,
+	supabaseAdmin: any,
+) {
+	try {
+		// Look for debts where we've sent emails to this fromEmail and are awaiting response
+		// Include multiple statuses that indicate we're in an active negotiation
+		const { data: debts, error } = await supabaseAdmin
+			.from("debts")
+			.select("*")
+			.in("status", ["sent", "awaiting_response", "counter_negotiating"])
+			.contains("metadata", { fromEmail: fromEmail, toEmail: toEmail })
+			.order("last_message_at", { ascending: false });
+
+		if (error) {
+			console.error("Error checking for existing negotiation:", error);
+			return null;
+		}
+
+		// Return the most recent debt that matches
+		return debts && debts.length > 0 ? debts[0] : null;
+	} catch (error) {
+		console.error("Error in checkForExistingNegotiation:", error);
+		return null;
+	}
+}
+
+// Handle response to existing negotiation
+async function handleNegotiationResponse(
+	debt: any,
+	emailData: any,
+	supabaseAdmin: any,
+) {
+	try {
+		const textBody = emailData.TextBody || emailData.HtmlBody || "";
+		const fromEmail = emailData.FromFull?.Email || emailData.From || "unknown";
+		const subject = emailData.Subject || "";
+		const messageId = emailData.MessageID || `inbound-${Date.now()}`;
+
+		// First, record this message in the conversation
+		await supabaseAdmin.from("conversation_messages").insert({
+			debt_id: debt.id,
+			message_type: "response_received",
+			direction: "inbound",
+			subject: subject,
+			body: textBody,
+			from_email: fromEmail,
+			to_email: emailData.ToFull?.[0]?.Email || emailData.To || "",
+			message_id: messageId,
+		});
+
+		// Update debt conversation tracking
+		await supabaseAdmin
+			.from("debts")
+			.update({
+				conversation_count: debt.conversation_count + 1,
+				last_message_at: new Date().toISOString(),
+				status: "counter_negotiating", // Temporary status while analyzing
+			})
+			.eq("id", debt.id);
+
+		// Call the analyze-response function
+		const supabaseUrl = process.env.SUPABASE_URL ||
+			import.meta.env.PUBLIC_SUPABASE_URL;
+		const supabaseServiceKey = process.env.SUPABASE_SERVICE_ROLE_KEY ||
+			import.meta.env.SUPABASE_SERVICE_ROLE_KEY;
+
+		if (supabaseUrl && supabaseServiceKey) {
+			const analyzeUrl = `${supabaseUrl}/functions/v1/analyze-response`;
+
+			try {
+				const response = await fetch(analyzeUrl, {
+					method: "POST",
+					headers: {
+						Authorization: `Bearer ${supabaseServiceKey}`,
+						"Content-Type": "application/json",
+					},
+					body: JSON.stringify({
+						debtId: debt.id,
+						fromEmail,
+						subject,
+						body: textBody,
+						messageId: messageId,
+					}),
+				});
+
+				if (response.ok) {
+					const result = await response.json();
+					console.log("Response analysis completed:", result);
+
+					// Update the conversation message with AI analysis
+					// !MAYBE NEEDED
+					// await supabaseAdmin
+					// 	.from("conversation_messages")
+					// 	.update({
+					// 		ai_analysis: result.analysis,
+					// 		message_type: result.analysis?.intent === "acceptance"
+					// 			? "acceptance"
+					// 			: result.analysis?.intent === "rejection"
+					// 			? "rejection"
+					// 			: "response_received",
+					// 	})
+					// 	.eq("message_id", messageId);
+
+					return new Response(
+						JSON.stringify({
+							success: true,
+							message: "Negotiation response processed",
+							analysis: result.analysis,
+						}),
+						{
+							status: 200,
+							headers: { "Content-Type": "application/json" },
+						},
+					);
+				} else {
+					console.error(
+						"Error calling analyze-response function:",
+						await response.text(),
+					);
+				}
+			} catch (analyzeError) {
+				console.error("Error calling analyze-response function:", analyzeError);
+			}
+		}
+
+		// Fallback: just log the response and mark for manual review
+		await supabaseAdmin.from("audit_logs").insert({
+			debt_id: debt.id,
+			action: "response_received_fallback",
+			details: {
+				fromEmail,
+				subject,
+				bodyPreview: textBody.substring(0, 200),
+				requiresManualReview: true,
+			},
+		});
+
+		// Update status to require user review
+		await supabaseAdmin
+			.from("debts")
+			.update({ status: "awaiting_response" })
+			.eq("id", debt.id);
+
+		return new Response(
+			JSON.stringify({ success: true, message: "Response logged" }),
+			{
+				status: 200,
+				headers: { "Content-Type": "application/json" },
+			},
+		);
+	} catch (error) {
+		console.error("Error handling negotiation response:", error);
+		return new Response(
+			JSON.stringify({ error: "Failed to process negotiation response" }),
+			{
+				status: 500,
+				headers: { "Content-Type": "application/json" },
+			},
+		);
+	}
+}
+
 export const POST: APIRoute = async ({ request }) => {
 	try {
 		// Create service role client for webhook operations (bypasses RLS)
@@ -180,6 +345,21 @@ export const POST: APIRoute = async ({ request }) => {
 			return new Response("No matching user found", { status: 200 });
 		}
 
+		// Check if this is a response to an existing negotiation
+		const existingDebt = await checkForExistingNegotiation(
+			fromEmail,
+			toEmail,
+			supabaseAdmin,
+		);
+
+		console.log({ existingDebt, fromEmail, toEmail });
+		if (existingDebt) {
+			console.log(
+				`Found existing negotiation for debt ${existingDebt.id}, analyzing response...`,
+			);
+			return await handleNegotiationResponse(existingDebt, data, supabaseAdmin);
+		}
+
 		// Increment email processing usage
 		await incrementEmailUsage(userId, supabaseAdmin);
 
@@ -248,6 +428,9 @@ export const POST: APIRoute = async ({ request }) => {
 				status: "received",
 				description: debtInfo.description,
 				due_date: debtInfo.dueDate,
+				conversation_count: 1,
+				last_message_at: new Date().toISOString(),
+				negotiation_round: 1,
 				metadata: {
 					isDebtCollection: debtInfo.isDebtCollection,
 					subject: data.Subject,
@@ -258,6 +441,20 @@ export const POST: APIRoute = async ({ request }) => {
 			.select()
 			.single();
 
+		if (!insertError && insertedDebt) {
+			// Record the initial debt email as the first conversation message
+			await supabaseAdmin.from("conversation_messages").insert({
+				debt_id: insertedDebt.id,
+				message_type: "initial_debt",
+				direction: "inbound",
+				subject: data.Subject,
+				body: textBody,
+				from_email: fromEmail,
+				to_email: toEmail,
+				message_id: data.MessageID || `initial-${Date.now()}`,
+			});
+		}
+
 		if (insertError) {
 			console.error("Error inserting debt:", insertError);
 			const errorInfo = handleDatabaseError(insertError);

supabase/functions/analyze-response/index.ts

@@ -0,0 +1,754 @@
+import { serve } from "https://deno.land/std@0.168.0/http/server.ts";
+import { createClient } from "https://esm.sh/@supabase/supabase-js@2";
+import { generateObject } from "https://esm.sh/ai@3.4.7";
+import { createGoogleGenerativeAI } from "https://esm.sh/@ai-sdk/google@0.0.52";
+import { z } from "https://esm.sh/zod@3.22.4";
+
+const corsHeaders = {
+  "Access-Control-Allow-Origin": "*",
+  "Access-Control-Allow-Headers":
+    "authorization, x-client-info, apikey, content-type",
+};
+
+// Schema for AI response analysis
+const responseAnalysisSchema = z.object({
+  intent: z.enum([
+    "acceptance",
+    "rejection",
+    "counter_offer",
+    "request_info",
+    "unclear",
+  ])
+    .describe("The primary intent of the response"),
+  sentiment: z.enum(["positive", "negative", "neutral"])
+    .describe("Overall sentiment of the response"),
+  confidence: z.number().min(0).max(1)
+    .describe("Confidence in the intent classification"),
+  extractedTerms: z.object({
+    proposedAmount: z.number().optional().describe(
+      "Any amount mentioned in response",
+    ),
+    proposedPaymentPlan: z.string().optional().describe(
+      "Payment plan details if mentioned",
+    ),
+    paymentTerms: z.object({
+      monthlyAmount: z.number().optional().describe("Monthly payment amount"),
+      numberOfPayments: z.number().optional().describe(
+        "Number of payments/installments",
+      ),
+      totalAmount: z.number().optional().describe("Total amount to be paid"),
+      interestRate: z.number().optional().describe(
+        "Interest rate if applicable",
+      ),
+      paymentFrequency: z.string().optional().describe(
+        "Payment frequency (monthly, weekly, etc.)",
+      ),
+    }).optional().describe("Structured payment plan terms"),
+    deadline: z.string().optional().describe("Any deadline mentioned"),
+    conditions: z.array(z.string()).optional().describe(
+      "Any conditions or requirements mentioned",
+    ),
+  }).describe("Key terms extracted from the response"),
+  reasoning: z.string().describe("Explanation of the analysis"),
+  suggestedNextAction: z.enum([
+    "accept_offer",
+    "send_counter",
+    "request_clarification",
+    "escalate_to_user",
+    "mark_settled",
+  ]).describe("Recommended next action"),
+  requiresUserReview: z.boolean().describe(
+    "Whether this response needs human review",
+  ),
+});
+
+interface EmailResponseData {
+  debtId: string;
+  fromEmail: string;
+  subject: string;
+  body: string;
+  messageId?: string;
+}
+
+// AI-powered response analysis
+async function analyzeEmailResponse(
+  debtId: string,
+  fromEmail: string,
+  subject: string,
+  body: string,
+  originalNegotiation?: any,
+) {
+  try {
+    const googleApiKey = Deno.env.get("GOOGLE_GENERATIVE_AI_API_KEY");
+    if (!googleApiKey) {
+      console.warn("Google API key not configured, using fallback analysis");
+      return getFallbackAnalysis(body);
+    }
+
+    console.log("Analyzing email with AI:", {
+      fromEmail,
+      subject,
+      bodyLength: body.length,
+    });
+
+    console.log({
+      debtId,
+      fromEmail,
+      subject,
+      body,
+      originalNegotiation,
+    });
+
+    const system =
+      `You are an expert financial analysis AI. Your sole function is to meticulously analyze creditor emails and populate a structured JSON object that conforms to the provided schema.
+
+Your entire output MUST be a single, valid JSON object. Do not include any markdown, explanations, or conversational text outside of the JSON structure itself.
+
+--- FIELD-BY-FIELD INSTRUCTIONS ---
+
+1.  **intent**: Classify the creditor's primary intent.
+    - "acceptance": Clear agreement to our original proposal.
+    - "rejection": Clear refusal of our proposal without offering new terms.
+    - "counter_offer": Proposes ANY new financial terms (different amount, payment plan, etc.). This is the most common intent besides acceptance.
+    - "request_info": Asks for more information (e.g., "Can you provide proof of hardship?").
+    - "unclear": The purpose of the email cannot be determined.
+
+2.  **sentiment**: Classify the emotional tone of the email.
+    - "positive": Cooperative, polite, agreeable language.
+    - "negative": Hostile, demanding, or threatening language.
+    - "neutral": Strictly professional, factual, and devoid of emotional language.
+
+3.  **confidence**: Provide a score from 0.0 to 1.0 for your "intent" classification. (e.g., 0.95).
+
+4.  **extractedTerms**:
+    - **proposedAmount**: Extract a single, lump-sum settlement amount if offered. If the offer is a payment plan, this field should be null.
+    - **proposedPaymentPlan**: Capture the payment plan offer as a descriptive string, exactly as the creditor states it. e.g., "$100 a month for 12 months". If no plan is mentioned, this is null.
+    - **paymentTerms**: If a payment plan is mentioned, break it down into its structured components here. If no plan is mentioned, this entire object should be null.
+        - **monthlyAmount**: The specific amount for each payment.
+        - **numberOfPayments**: The number of installments.
+        - **totalAmount**: The total payout of the plan, ONLY if explicitly stated (e.g., "...totaling $1200").
+        - **interestRate**: The interest rate as a number (e.g., for "5% interest", extract 5).
+        - **paymentFrequency**: The frequency (e.g., "monthly", "weekly", "bi-weekly").
+    - **deadline**: Extract any specific date or timeframe for action (e.g., "by June 30th", "within 10 days").
+    - **conditions**: Extract all non-financial requirements as an array of strings. Example: ["Payment must be via certified funds", "A settlement agreement must be signed"]. If none, use an empty array [].
+
+5.  **reasoning**: Briefly explain the logic behind your "intent" and "suggestedNextAction" classifications, referencing parts of the email.
+
+6.  **suggestedNextAction**: Recommend the most logical business action.
+    - "accept_offer": The creditor's offer matches or is better than our goal.
+    - "send_counter": The creditor made a counter-offer that we should negotiate.
+    - "request_clarification": The email is ambiguous or missing key information.
+    - "escalate_to_user": The response is hostile, contains legal threats, is complex, or requires a human decision.
+    - "mark_settled": The email confirms the debt is fully settled and no further action is needed.
+
+7.  **requiresUserReview**: Set to 'true' if intent is "unclear", sentiment is "negative", confidence is below 0.85, the email contains unusual legal language, or the "suggestedNextAction" is "escalate_to_user". Otherwise, set to 'false'.`;
+
+    const prompt =
+      `Analyze the following email and extract the financial details and intent, populating the JSON object according to your system instructions.
+
+--- EMAIL TO ANALYZE ---
+From: ${fromEmail}
+Subject: ${subject}
+Body: ${body}
+
+${
+        originalNegotiation
+          ? `--- ORIGINAL CONTEXT FOR YOUR ANALYSIS ---
+Our Negotiation Strategy: ${originalNegotiation.strategy}
+Our Proposed Amount: $${originalNegotiation.proposedAmount || "N/A"}
+Our Proposed Terms: ${originalNegotiation.terms || "N/A"}
+Our Reasoning: ${originalNegotiation.reasoning || "N/A"}
+Our Latest Email Body: ${originalNegotiation.body || "N/A"}
+`
+          : ""
+      }`;
+
+    console.log("AI Analysis System:", system);
+    console.log("AI Analysis Prompt:", prompt);
+
+    const result = await generateObject({
+      model: createGoogleGenerativeAI({
+        apiKey: googleApiKey,
+      })("gemini-2.5-flash-preview-04-17"),
+      system,
+      prompt,
+      schema: responseAnalysisSchema,
+    });
+
+    console.log("AI Analysis Result:", JSON.stringify(result.object, null, 2));
+    console.log(
+      "Extracted Terms:",
+      JSON.stringify(result.object.extractedTerms, null, 2),
+    );
+
+    return result.object;
+  } catch (error) {
+    console.error("AI response analysis error:", error);
+    console.log("Falling back to regex-based analysis");
+    return getFallbackAnalysis(body);
+  }
+}
+
+// Calculate financial outcome when offer is accepted
+function calculateFinancialOutcome(debt: any, analysis: any): any {
+  try {
+    const originalAmount = debt.amount || 0;
+    let acceptedAmount = originalAmount;
+    let paymentStructure = null;
+    let financialBenefit = null;
+
+    // Try to extract accepted amount from AI analysis
+    if (analysis.extractedTerms?.proposedAmount) {
+      acceptedAmount = analysis.extractedTerms.proposedAmount;
+    } else if (analysis.extractedTerms?.paymentTerms?.totalAmount) {
+      acceptedAmount = analysis.extractedTerms.paymentTerms.totalAmount;
+    } else if (debt.metadata?.prospectedSavings?.amount) {
+      // Fall back to original negotiation terms if no specific amount mentioned
+      acceptedAmount = originalAmount - debt.metadata.prospectedSavings.amount;
+    }
+
+    // Analyze payment structure if present
+    if (analysis.extractedTerms?.paymentTerms) {
+      const terms = analysis.extractedTerms.paymentTerms;
+      paymentStructure = {
+        type: "installment_plan",
+        monthlyAmount: terms.monthlyAmount,
+        numberOfPayments: terms.numberOfPayments,
+        totalAmount: terms.totalAmount || acceptedAmount,
+        frequency: terms.paymentFrequency || "monthly",
+        interestRate: terms.interestRate || 0,
+      };
+
+      // Calculate time value and cash flow benefits
+      if (terms.monthlyAmount && terms.numberOfPayments) {
+        const totalPayments = terms.monthlyAmount * terms.numberOfPayments;
+        const timeToComplete = terms.numberOfPayments; // in months
+
+        financialBenefit = {
+          type: "payment_restructuring",
+          principalReduction: Math.max(0, originalAmount - totalPayments),
+          cashFlowRelief: {
+            monthlyReduction: originalAmount - terms.monthlyAmount,
+            extendedTermMonths: timeToComplete,
+            totalCashFlowBenefit: (originalAmount - terms.monthlyAmount) *
+              timeToComplete,
+          },
+          timeValueBenefit: calculateTimeValueBenefit(
+            originalAmount,
+            terms.monthlyAmount,
+            timeToComplete,
+          ),
+        };
+      }
+    }
+
+    // Calculate actual savings (principal reduction)
+    const actualSavings = Math.max(0, originalAmount - acceptedAmount);
+
+    // Determine the primary financial benefit
+    if (actualSavings > 0) {
+      financialBenefit = {
+        type: "principal_reduction",
+        amount: actualSavings,
+        percentage: (actualSavings / originalAmount * 100).toFixed(2),
+        description: `${
+          ((actualSavings / originalAmount) * 100).toFixed(1)
+        }% principal reduction`,
+      };
+    } else if (paymentStructure && paymentStructure.monthlyAmount) {
+      // No principal reduction but payment restructuring
+      const monthlyReduction = originalAmount - paymentStructure.monthlyAmount;
+      financialBenefit = {
+        type: "payment_restructuring",
+        monthlyReduction: monthlyReduction,
+        extendedTermMonths: paymentStructure.numberOfPayments,
+        description:
+          `Payment restructured to $${paymentStructure.monthlyAmount}/month over ${paymentStructure.numberOfPayments} months`,
+        cashFlowBenefit: monthlyReduction > 0
+          ? `$${monthlyReduction}/month cash flow relief`
+          : "Extended payment terms",
+      };
+    }
+
+    console.log(
+      `Financial outcome: Original: $${originalAmount}, Accepted: $${acceptedAmount}, Savings: $${actualSavings}`,
+    );
+
+    return {
+      actualSavings,
+      acceptedAmount,
+      paymentStructure,
+      financialBenefit,
+      originalAmount,
+    };
+  } catch (error) {
+    console.error("Error calculating financial outcome:", error);
+    // Return basic fallback
+    return {
+      actualSavings: debt.projected_savings || 0,
+      acceptedAmount: debt.amount,
+      paymentStructure: null,
+      financialBenefit: null,
+      originalAmount: debt.amount,
+    };
+  }
+}
+
+// Calculate time value benefit of extended payment terms
+function calculateTimeValueBenefit(
+  originalAmount: number,
+  monthlyPayment: number,
+  months: number,
+): any {
+  // Simple present value calculation assuming 5% annual discount rate
+  const monthlyRate = 0.05 / 12;
+  let presentValue = 0;
+
+  for (let i = 1; i <= months; i++) {
+    presentValue += monthlyPayment / Math.pow(1 + monthlyRate, i);
+  }
+
+  const timeValueBenefit = originalAmount - presentValue;
+
+  return {
+    presentValueOfPayments: presentValue.toFixed(2),
+    timeValueBenefit: timeValueBenefit.toFixed(2),
+    effectiveDiscount: ((timeValueBenefit / originalAmount) * 100).toFixed(2),
+  };
+}
+
+// Fallback analysis when AI is unavailable
+function getFallbackAnalysis(
+  body: string,
+): typeof responseAnalysisSchema._type {
+  const lowerBody = body.toLowerCase();
+
+  // Simple keyword-based analysis
+  let intent:
+    | "acceptance"
+    | "rejection"
+    | "counter_offer"
+    | "request_info"
+    | "unclear" = "unclear";
+  let sentiment: "positive" | "negative" | "neutral" = "neutral";
+
+  if (
+    lowerBody.includes("accept") || lowerBody.includes("agree") ||
+    lowerBody.includes("approved")
+  ) {
+    intent = "acceptance";
+    sentiment = "positive";
+  } else if (
+    lowerBody.includes("reject") || lowerBody.includes("decline") ||
+    lowerBody.includes("denied")
+  ) {
+    intent = "rejection";
+    sentiment = "negative";
+  } else if (
+    lowerBody.includes("counter") || lowerBody.includes("instead") ||
+    lowerBody.includes("however")
+  ) {
+    intent = "counter_offer";
+    sentiment = "neutral";
+  } else if (
+    lowerBody.includes("information") || lowerBody.includes("clarify") ||
+    lowerBody.includes("details")
+  ) {
+    intent = "request_info";
+    sentiment = "neutral";
+  }
+
+  // Enhanced extraction using multiple regex patterns
+  const extractFinancialTerms = (text: string) => {
+    // Extract dollar amounts
+    const amountMatches = text.match(/\$(\d+(?:,\d{3})*(?:\.\d{2})?)/g);
+    const amounts =
+      amountMatches?.map((match) => parseFloat(match.replace(/[$,]/g, ""))) ||
+      [];
+
+    // Extract monthly payment patterns
+    const monthlyMatch = text.match(
+      /\$?(\d+(?:,\d{3})*(?:\.\d{2})?)\s*(?:per month|\/month|monthly)/i,
+    );
+    const monthlyAmount = monthlyMatch
+      ? parseFloat(monthlyMatch[1].replace(/,/g, ""))
+      : undefined;
+
+    // Extract number of payments/months
+    const paymentsMatch = text.match(
+      /(\d+)\s*(?:months?|payments?|installments?)/i,
+    );
+    const numberOfPayments = paymentsMatch
+      ? parseInt(paymentsMatch[1])
+      : undefined;
+
+    // Extract total amount patterns
+    const totalMatch = text.match(
+      /(?:total|totaling|total amount)\s*(?:of\s*)?\$?(\d+(?:,\d{3})*(?:\.\d{2})?)/i,
+    );
+    const totalAmount = totalMatch
+      ? parseFloat(totalMatch[1].replace(/,/g, ""))
+      : undefined;
+
+    // Determine payment frequency
+    let paymentFrequency = undefined;
+    if (text.match(/monthly|per month|\/month/i)) paymentFrequency = "monthly";
+    else if (text.match(/weekly|per week|\/week/i)) paymentFrequency = "weekly";
+    else if (text.match(/bi-weekly|biweekly|every two weeks/i)) {
+      paymentFrequency = "bi-weekly";
+    }
+
+    return {
+      proposedAmount: amounts.length > 0 ? amounts[0] : undefined,
+      monthlyAmount,
+      numberOfPayments,
+      totalAmount,
+      paymentFrequency,
+      allAmounts: amounts,
+    };
+  };
+
+  const terms = extractFinancialTerms(body);
+
+  console.log(
+    "Fallback Analysis - Extracted Terms:",
+    JSON.stringify(terms, null, 2),
+  );
+
+  const result = {
+    intent,
+    sentiment,
+    confidence: 0.6, // Lower confidence for fallback
+    extractedTerms: {
+      proposedAmount: terms.proposedAmount,
+      proposedPaymentPlan: terms.monthlyAmount ? "payment plan" : undefined,
+      paymentTerms: (terms.monthlyAmount || terms.numberOfPayments)
+        ? {
+          monthlyAmount: terms.monthlyAmount,
+          numberOfPayments: terms.numberOfPayments,
+          totalAmount: terms.totalAmount,
+          paymentFrequency: terms.paymentFrequency,
+        }
+        : undefined,
+      deadline: undefined,
+      conditions: [],
+    },
+    reasoning:
+      `Generated using enhanced keyword-based fallback analysis. Found ${terms.allAmounts.length} amounts.`,
+    suggestedNextAction: intent === "acceptance"
+      ? "mark_settled"
+      : intent === "rejection"
+      ? "escalate_to_user"
+      : intent === "counter_offer"
+      ? "send_counter"
+      : "escalate_to_user",
+    requiresUserReview: true, // Always require review for fallback
+  };
+
+  console.log("Fallback Analysis Result:", JSON.stringify(result, null, 2));
+  return result;
+}
+
+serve(async (req) => {
+  if (req.method === "OPTIONS") {
+    return new Response("ok", { headers: corsHeaders });
+  }
+
+  try {
+    const supabaseClient = createClient(
+      Deno.env.get("SUPABASE_URL") ?? "",
+      Deno.env.get("SUPABASE_ANON_KEY") ?? "",
+      {
+        global: {
+          headers: { Authorization: req.headers.get("Authorization")! },
+        },
+      },
+    );
+
+    const { debtId, fromEmail, subject, body, messageId }: EmailResponseData =
+      await req.json();
+
+    if (!debtId || !fromEmail || !body) {
+      return new Response(
+        JSON.stringify({
+          error: "Missing required fields: debtId, fromEmail, body",
+        }),
+        {
+          status: 400,
+          headers: { ...corsHeaders, "Content-Type": "application/json" },
+        },
+      );
+    }
+
+    // Get the debt record and original negotiation context
+    const { data: debt, error: debtError } = await supabaseClient
+      .from("debts")
+      .select("*")
+      .eq("id", debtId)
+      .single();
+
+    if (debtError || !debt) {
+      return new Response(
+        JSON.stringify({ error: "Debt record not found" }),
+        {
+          status: 404,
+          headers: { ...corsHeaders, "Content-Type": "application/json" },
+        },
+      );
+    }
+
+    // Analyze the response using AI
+    const analysis = await analyzeEmailResponse(
+      debtId,
+      fromEmail,
+      subject,
+      body,
+      debt.metadata?.aiEmail,
+    );
+
+    // Store the conversation message
+    const { error: messageError } = await supabaseClient
+      .from("conversation_messages")
+      .update({
+        debt_id: debtId,
+        message_type: analysis.intent === "acceptance"
+          ? "acceptance"
+          : analysis.intent === "rejection"
+          ? "rejection"
+          : analysis.intent === "counter_offer"
+          ? "counter_offer"
+          : "response_received",
+        direction: "inbound",
+        subject,
+        body,
+        from_email: fromEmail,
+        to_email: debt.metadata?.toEmail || debt.metadata?.fromEmail,
+        ai_analysis: analysis,
+      })
+      .eq("message_id", messageId);
+
+    if (messageError) {
+      console.error("Error storing conversation message:", messageError);
+    }
+
+    // Determine next status and actions based on analysis
+    let newStatus = debt.status;
+    let newNegotiationRound = debt.negotiation_round || 1;
+    let financialOutcome = null;
+    let shouldAutoRespond = false;
+    let nextAction = null;
+
+    switch (analysis.intent) {
+      case "acceptance":
+        newStatus = "accepted";
+        nextAction = "mark_settled";
+        // Calculate financial outcome when offer is accepted
+        financialOutcome = calculateFinancialOutcome(debt, analysis);
+        break;
+      case "rejection":
+        newStatus = "rejected";
+        nextAction = "escalate_to_user";
+        break;
+      case "counter_offer":
+        newStatus = "counter_negotiating";
+        newNegotiationRound += 1;
+        shouldAutoRespond = !analysis.requiresUserReview &&
+          analysis.confidence > 0.8;
+        nextAction = analysis.suggestedNextAction;
+        break;
+      case "request_info":
+        newStatus = "awaiting_response";
+        nextAction = "escalate_to_user";
+        break;
+      default:
+        newStatus = "awaiting_response";
+        nextAction = "escalate_to_user";
+    }
+
+    // Update debt record
+    const updateData: any = {
+      status: newStatus,
+      negotiation_round: newNegotiationRound,
+      conversation_count: (debt.conversation_count || 0) + 1,
+      last_message_at: new Date().toISOString(),
+      metadata: {
+        ...debt.metadata,
+        lastResponse: {
+          analysis,
+          receivedAt: new Date().toISOString(),
+          fromEmail,
+          subject,
+        },
+      },
+    };
+
+    // Add financial outcome if offer was accepted
+    if (analysis.intent === "acceptance" && financialOutcome) {
+      updateData.actual_savings = financialOutcome.actualSavings;
+      updateData.status = "settled"; // Set final status here instead of separate update
+      updateData.metadata.financialOutcome = {
+        ...financialOutcome,
+        calculatedAt: new Date().toISOString(),
+      };
+
+      // Keep backward compatibility with actualSavings field
+      updateData.metadata.actualSavings = {
+        amount: financialOutcome.actualSavings,
+        calculatedAt: new Date().toISOString(),
+        originalAmount: financialOutcome.originalAmount,
+        acceptedAmount: financialOutcome.acceptedAmount,
+        savingsPercentage: financialOutcome.originalAmount > 0
+          ? (financialOutcome.actualSavings / financialOutcome.originalAmount *
+            100).toFixed(2)
+          : 0,
+      };
+    }
+
+    const { error: updateError } = await supabaseClient
+      .from("debts")
+      .update(updateData)
+      .eq("id", debtId);
+
+    if (updateError) {
+      console.error("Error updating debt:", updateError);
+    }
+
+    // Log the action
+    const auditDetails: any = {
+      intent: analysis.intent,
+      sentiment: analysis.sentiment,
+      confidence: analysis.confidence,
+      fromEmail,
+      subject,
+      suggestedAction: analysis.suggestedNextAction,
+      requiresReview: analysis.requiresUserReview,
+    };
+
+    // Add financial outcome to audit log if offer was accepted
+    if (analysis.intent === "acceptance" && financialOutcome) {
+      auditDetails.financialOutcome = financialOutcome;
+      auditDetails.actualSavings = financialOutcome.actualSavings;
+      auditDetails.originalAmount = financialOutcome.originalAmount;
+      auditDetails.acceptedAmount = financialOutcome.acceptedAmount;
+      auditDetails.savingsPercentage = financialOutcome.originalAmount > 0
+        ? (financialOutcome.actualSavings / financialOutcome.originalAmount *
+          100).toFixed(2)
+        : 0;
+    }
+
+    await supabaseClient
+      .from("audit_logs")
+      .insert({
+        debt_id: debtId,
+        action: analysis.intent === "acceptance"
+          ? "offer_accepted"
+          : "response_analyzed",
+        details: {
+          ...auditDetails,
+          nextAction,
+          shouldAutoRespond,
+          negotiationRound: newNegotiationRound,
+          reasoning: analysis.reasoning,
+        },
+      });
+
+    // If this is an acceptance, mark as settled
+    if (analysis.intent === "acceptance") {
+      // await supabaseClient
+      //   .from("debts")
+      //   .update({ status: "settled" })
+      //   .eq("id", debtId);
+
+      await supabaseClient.from("audit_logs").insert({
+        debt_id: debtId,
+        action: "debt_settled",
+        details: {
+          finalAmount: financialOutcome?.acceptedAmount || debt.amount,
+          actualSavings: financialOutcome?.actualSavings || 0,
+          settlementTerms: analysis.extractedTerms,
+        },
+      });
+    }
+
+    // If auto-response is recommended and confidence is high, trigger negotiation
+    if (
+      shouldAutoRespond && analysis.confidence > 0.8 &&
+      analysis.intent === "counter_offer"
+    ) {
+      try {
+        const negotiateUrl = `${
+          Deno.env.get("SUPABASE_URL")
+        }/functions/v1/negotiate`;
+        const serviceKey = Deno.env.get("SUPABASE_SERVICE_ROLE_KEY");
+
+        if (negotiateUrl && serviceKey) {
+          await fetch(negotiateUrl, {
+            method: "POST",
+            headers: {
+              Authorization: `Bearer ${serviceKey}`,
+              "Content-Type": "application/json",
+            },
+            body: JSON.stringify({
+              record: {
+                ...debt,
+                status: newStatus,
+                conversation_count: (debt.conversation_count || 0) + 1,
+                negotiation_round: newNegotiationRound,
+              },
+              counterOfferContext: {
+                previousResponse: body,
+                extractedTerms: analysis.extractedTerms,
+                sentiment: analysis.sentiment,
+              },
+            }),
+          });
+
+          await supabaseClient.from("audit_logs").insert({
+            debt_id: debtId,
+            action: "auto_counter_triggered",
+            details: {
+              confidence: analysis.confidence,
+              extractedTerms: analysis.extractedTerms,
+            },
+          });
+        }
+      } catch (autoResponseError) {
+        console.error("Error triggering auto-response:", autoResponseError);
+      }
+    }
+
+    const responseData: any = {
+      success: true,
+      analysis,
+      newStatus,
+      negotiationRound: newNegotiationRound,
+    };
+
+    // Include financial outcome in response if offer was accepted
+    if (analysis.intent === "acceptance" && financialOutcome) {
+      responseData.financialOutcome = financialOutcome;
+      responseData.actualSavings = financialOutcome.actualSavings;
+      responseData.savingsCalculated = true;
+      responseData.originalAmount = financialOutcome.originalAmount;
+      responseData.acceptedAmount = financialOutcome.acceptedAmount;
+      responseData.savingsPercentage = financialOutcome.originalAmount > 0
+        ? (financialOutcome.actualSavings / financialOutcome.originalAmount *
+          100).toFixed(2)
+        : 0;
+    }
+
+    return new Response(
+      JSON.stringify(responseData),
+      { headers: { ...corsHeaders, "Content-Type": "application/json" } },
+    );
+  } catch (error) {
+    console.error("Error in analyze-response function:", error);
+    return new Response(
+      JSON.stringify({ error: "Internal server error" }),
+      {
+        status: 500,
+        headers: { ...corsHeaders, "Content-Type": "application/json" },
+      },
+    );
+  }
+});

supabase/functions/send-email/index.ts

@@ -31,11 +31,14 @@ interface DebtRecord {
   amount: number;
   raw_email: string;
   negotiated_plan?: string;
+  projected_savings?: number;
+  conversation_count?: number;
   metadata?: {
     aiEmail?: {
       subject: string;
       body: string;
       strategy: string;
+      confidence?: number;
     };
     toEmail?: string;
     fromEmail?: string;
@@ -243,11 +246,20 @@ Deno.serve(async (req) => {
         body,
       );
 
-      // Update debt status to sent - using authenticated client
+      // Update debt status to sent and preserve negotiating state
+      const { data: currentDebt } = await supabaseClient
+        .from("debts")
+        .select("conversation_count, negotiation_round")
+        .eq("id", debtId)
+        .single();
+
       const { error: updateError } = await supabaseClient
         .from("debts")
         .update({
           status: "sent",
+          conversation_count: (currentDebt?.conversation_count || 0) + 1,
+          last_message_at: new Date().toISOString(),
+          prospected_savings: debt.projected_savings || 0, // Store prospected savings when sent
           metadata: {
             ...debt.metadata,
             emailSent: {
@@ -257,6 +269,14 @@ Deno.serve(async (req) => {
               from: fromEmail,
               subject: subject,
             },
+            prospectedSavings: {
+              amount: debt.projected_savings || 0,
+              percentage: debt.amount > 0
+                ? ((debt.projected_savings || 0) / debt.amount * 100).toFixed(2)
+                : 0,
+              calculatedAt: new Date().toISOString(),
+              strategy: debt.metadata?.aiEmail?.strategy || "unknown",
+            },
           },
         })
         .eq("id", debtId);
@@ -265,20 +285,35 @@ Deno.serve(async (req) => {
         console.error("Error updating debt status:", updateError);
       }
 
-      // Log the action - using authenticated client
+      // Record the sent email in conversation history
-      await supabaseClient
+      await supabaseClient.from("conversation_messages").insert({
-        .from("audit_logs")
+        debt_id: debtId,
-        .insert({
+        message_type: "negotiation_sent",
-          debt_id: debtId,
+        direction: "outbound",
-          action: "email_sent",
+        subject: subject,
-          details: {
+        body: body,
-            messageId: emailResult.MessageID,
+        from_email: fromEmail,
-            to: toEmail,
+        to_email: toEmail,
-            from: fromEmail,
+        message_id: emailResult.MessageID,
-            subject: subject,
+        ai_analysis: {
-            strategy: debt.metadata.aiEmail.strategy,
+          strategy: debt.metadata.aiEmail.strategy,
-          },
+          confidence: debt.metadata.aiEmail.confidence,
-        });
+          projectedSavings: debt.projected_savings,
+        },
+      });
+
+      // Log the email sending
+      await supabaseClient.from("audit_logs").insert({
+        debt_id: debtId,
+        action: "email_sent",
+        details: {
+          to: toEmail,
+          subject: subject,
+          postmarkMessageId: emailResult.MessageID,
+          conversationRound: currentDebt?.negotiation_round || 1,
+          strategy: debt.metadata.aiEmail.strategy,
+        },
+      });
 
       return new Response(
         JSON.stringify({

supabase/functions/test-extraction/index.ts

@@ -0,0 +1,170 @@
+import { serve } from "https://deno.land/std@0.168.0/http/server.ts";
+import { generateObject } from "https://esm.sh/ai@3.4.7";
+import { createGoogleGenerativeAI } from "https://esm.sh/@ai-sdk/google@0.0.52";
+import { z } from "https://esm.sh/zod@3.22.4";
+
+const corsHeaders = {
+  "Access-Control-Allow-Origin": "*",
+  "Access-Control-Allow-Headers":
+    "authorization, x-client-info, apikey, content-type",
+};
+
+// Same schema as analyze-response
+const responseAnalysisSchema = z.object({
+  intent: z.enum([
+    "acceptance",
+    "rejection", 
+    "counter_offer",
+    "request_info",
+    "unclear",
+  ]).describe("The primary intent of the response"),
+  sentiment: z.enum(["positive", "negative", "neutral"])
+    .describe("Overall sentiment of the response"),
+  confidence: z.number().min(0).max(1)
+    .describe("Confidence in the intent classification"),
+  extractedTerms: z.object({
+    proposedAmount: z.number().optional().describe(
+      "Any amount mentioned in response",
+    ),
+    proposedPaymentPlan: z.string().optional().describe(
+      "Payment plan details if mentioned",
+    ),
+    paymentTerms: z.object({
+      monthlyAmount: z.number().optional().describe("Monthly payment amount"),
+      numberOfPayments: z.number().optional().describe(
+        "Number of payments/installments",
+      ),
+      totalAmount: z.number().optional().describe("Total amount to be paid"),
+      interestRate: z.number().optional().describe(
+        "Interest rate if applicable",
+      ),
+      paymentFrequency: z.string().optional().describe(
+        "Payment frequency (monthly, weekly, etc.)",
+      ),
+    }).optional().describe("Structured payment plan terms"),
+    deadline: z.string().optional().describe("Any deadline mentioned"),
+    conditions: z.array(z.string()).optional().describe(
+      "Any conditions or requirements mentioned",
+    ),
+  }).describe("Key terms extracted from the response"),
+  reasoning: z.string().describe("Explanation of the analysis"),
+  suggestedNextAction: z.enum([
+    "accept_offer",
+    "send_counter",
+    "request_clarification",
+    "escalate_to_user",
+    "mark_settled",
+  ]).describe("Recommended next action"),
+  requiresUserReview: z.boolean().describe(
+    "Whether this response needs human review",
+  ),
+});
+
+serve(async (req) => {
+  if (req.method === "OPTIONS") {
+    return new Response("ok", { headers: corsHeaders });
+  }
+
+  try {
+    const { testEmail } = await req.json();
+
+    if (!testEmail) {
+      return new Response(
+        JSON.stringify({ error: "testEmail is required" }),
+        {
+          status: 400,
+          headers: { ...corsHeaders, "Content-Type": "application/json" },
+        }
+      );
+    }
+
+    const googleApiKey = Deno.env.get("GOOGLE_GENERATIVE_AI_API_KEY");
+    
+    if (!googleApiKey) {
+      return new Response(
+        JSON.stringify({ error: "Google API key not configured" }),
+        {
+          status: 500,
+          headers: { ...corsHeaders, "Content-Type": "application/json" },
+        }
+      );
+    }
+
+    console.log("Testing extraction with email:", testEmail);
+
+    const result = await generateObject({
+      model: createGoogleGenerativeAI({
+        apiKey: googleApiKey,
+      })("gemini-2.5-flash-preview-04-17"),
+      system: `You are an expert financial analyst specializing in debt collection and negotiation responses. 
+      Your job is to carefully analyze creditor responses and extract ALL financial terms mentioned.
+
+      CRITICAL: Always extract financial information when present. Look for:
+
+      AMOUNTS:
+      - Any dollar amounts mentioned ($1,000, $500, etc.)
+      - Settlement offers or counter-offers
+      - Monthly payment amounts
+      - Total payment amounts
+
+      PAYMENT PLANS:
+      - Monthly payment amounts (e.g., "$200 per month", "$150/month")
+      - Number of payments/installments (e.g., "12 months", "24 payments")
+      - Payment frequency (monthly, weekly, bi-weekly)
+      - Total amounts for payment plans
+      - Interest rates if mentioned
+
+      EXTRACT EVERYTHING: Even if amounts seem obvious, always include them in extractedTerms.`,
+      prompt: `Analyze this test email and extract ALL financial terms:
+
+      EMAIL: ${testEmail}
+
+      EXTRACTION REQUIREMENTS:
+      1. Find ANY dollar amounts mentioned in the email
+      2. Look for payment plan details (monthly amounts, number of payments)
+      3. Identify payment frequency (monthly, weekly, etc.)
+      4. Extract total amounts if mentioned
+      5. Note any interest rates or fees
+      6. Capture all conditions and requirements
+
+      EXAMPLES OF WHAT TO EXTRACT:
+      - "We can accept $250 per month" → monthlyAmount: 250
+      - "for 18 months" → numberOfPayments: 18
+      - "totaling $4,500" → totalAmount: 4500
+      - "settlement of $3,200" → proposedAmount: 3200
+      - "monthly payments" → paymentFrequency: "monthly"
+
+      Be thorough and extract ALL financial information present in the email.`,
+      schema: responseAnalysisSchema,
+    });
+
+    console.log("AI Analysis Result:", JSON.stringify(result.object, null, 2));
+
+    return new Response(
+      JSON.stringify({
+        success: true,
+        analysis: result.object,
+        extractedTerms: result.object.extractedTerms,
+        debug: {
+          emailLength: testEmail.length,
+          hasGoogleAPI: !!googleApiKey,
+          timestamp: new Date().toISOString()
+        }
+      }),
+      { headers: { ...corsHeaders, "Content-Type": "application/json" } }
+    );
+
+  } catch (error) {
+    console.error("Error in test-extraction function:", error);
+    return new Response(
+      JSON.stringify({ 
+        error: "Internal server error",
+        details: error.message 
+      }),
+      {
+        status: 500,
+        headers: { ...corsHeaders, "Content-Type": "application/json" },
+      }
+    );
+  }
+});

supabase/migrations/20250607012000_conversation_tracking.sql

@@ -0,0 +1,84 @@
+-- Enhanced conversation tracking and negotiation flow
+-- This migration adds comprehensive conversation tracking and improved status management
+
+-- Create conversation_messages table to track all email exchanges
+CREATE TABLE IF NOT EXISTS conversation_messages (
+  id uuid PRIMARY KEY DEFAULT gen_random_uuid(),
+  debt_id uuid REFERENCES debts(id) ON DELETE CASCADE NOT NULL,
+  message_type text NOT NULL CHECK (message_type IN ('initial_debt', 'negotiation_sent', 'response_received', 'counter_offer', 'acceptance', 'rejection')),
+  direction text NOT NULL CHECK (direction IN ('inbound', 'outbound')),
+  subject text,
+  body text NOT NULL,
+  from_email text,
+  to_email text,
+  message_id text, -- Postmark message ID for outbound, email ID for inbound
+  ai_analysis jsonb DEFAULT '{}'::jsonb, -- AI analysis of the message content
+  created_at timestamptz DEFAULT now(),
+  updated_at timestamptz DEFAULT now()
+);
+
+-- Add indexes for performance
+CREATE INDEX IF NOT EXISTS idx_conversation_messages_debt_id ON conversation_messages(debt_id);
+CREATE INDEX IF NOT EXISTS idx_conversation_messages_created_at ON conversation_messages(created_at);
+CREATE INDEX IF NOT EXISTS idx_conversation_messages_type ON conversation_messages(message_type);
+
+-- Update debts table status constraint to include new statuses
+ALTER TABLE debts 
+DROP CONSTRAINT IF EXISTS debts_status_check;
+
+ALTER TABLE debts 
+ADD CONSTRAINT debts_status_check 
+CHECK (status IN (
+  'received', 
+  'negotiating', 
+  'approved', 
+  'sent', 
+  'awaiting_response',
+  'counter_negotiating', 
+  'accepted', 
+  'rejected',
+  'settled', 
+  'failed', 
+  'opted_out'
+));
+
+-- Add conversation tracking fields to debts table
+ALTER TABLE debts ADD COLUMN IF NOT EXISTS conversation_count integer DEFAULT 0;
+ALTER TABLE debts ADD COLUMN IF NOT EXISTS last_message_at timestamptz DEFAULT now();
+ALTER TABLE debts ADD COLUMN IF NOT EXISTS negotiation_round integer DEFAULT 1;
+ALTER TABLE debts ADD COLUMN IF NOT EXISTS prospected_savings numeric DEFAULT 0;
+ALTER TABLE debts ADD COLUMN IF NOT EXISTS actual_savings numeric DEFAULT 0;
+
+-- Create indexes for new columns
+CREATE INDEX IF NOT EXISTS idx_debts_last_message_at ON debts(last_message_at);
+CREATE INDEX IF NOT EXISTS idx_debts_negotiation_round ON debts(negotiation_round);
+
+-- Enable RLS on conversation_messages
+ALTER TABLE conversation_messages ENABLE ROW LEVEL SECURITY;
+
+-- Add RLS policy for conversation_messages (users can only see their own debt conversations)
+CREATE POLICY "Users can view their own conversation messages" ON conversation_messages
+  FOR SELECT USING (
+    debt_id IN (
+      SELECT id FROM debts WHERE user_id = auth.uid()
+    )
+  );
+
+CREATE POLICY "Users can insert their own conversation messages" ON conversation_messages
+  FOR INSERT WITH CHECK (
+    debt_id IN (
+      SELECT id FROM debts WHERE user_id = auth.uid()
+    )
+  );
+
+-- Enable real-time for conversation_messages
+ALTER PUBLICATION supabase_realtime ADD TABLE conversation_messages;
+
+-- Add comments for documentation
+COMMENT ON TABLE conversation_messages IS 'Tracks all email exchanges in debt negotiations';
+COMMENT ON COLUMN conversation_messages.message_type IS 'Type of message in the negotiation flow';
+COMMENT ON COLUMN conversation_messages.direction IS 'Whether message was sent (outbound) or received (inbound)';
+COMMENT ON COLUMN conversation_messages.ai_analysis IS 'AI analysis results including intent, sentiment, and extracted terms';
+COMMENT ON COLUMN debts.conversation_count IS 'Total number of messages in this debt conversation';
+COMMENT ON COLUMN debts.last_message_at IS 'Timestamp of the most recent message in conversation';
+COMMENT ON COLUMN debts.negotiation_round IS 'Current round of negotiation (increments with each back-and-forth)';