The decision to file bankruptcy is not one to be taken lightly. It’s typically a his explanation last resort option that’s used after attempting other debt relief solutions. Bankruptcy can sabotage credit, impede access to loans, and result in the loss or valuable possessions. It also affects future financial goals like buying an automobile or home or job and getting insurance. Financial advisors suggest exploring other debt relief options before bankruptcy.
The most well-known type of bankruptcy is Chapter 7 which involves liquidating assets to pay creditors. The good thing is that a majority of people are able to keep certain essential items such as their home and high-value vehicles. In addition, there’s a great chance that any court action which has been filed in relation to unpaid debts is halted if someone is declared bankrupt.
In general, those with regular incomes are able to make a Chapter 13 to create a plan to pay off debts in three to five years. The good thing is that it impedes creditors from attempting to foreclose, seize or the wages of employees during this period.
With a complete and flexible bankruptcy processing solution such as Best Case by Stretto, loan servicers can automate notification of bankruptcy, monitor changes to account data and improve communication with attorneys. This powerful tool searches comprehensive bankruptcy databases across the country to automatically find and notify customers of any changes, helping them reduce risk and avoid unnecessary operational costs.