The decision to file for bankruptcy is not one to be taken lightly and it’s typically a last resort option after having tried other debt relief solutions. Bankruptcy could ruin credit, make it difficult to access loans, and result in the loss or valuable possessions. It can also impact the future financial goals of the person, such as purchasing a car or home, obtaining an insurance or job. Financial advisors advise exploring other debt relief options before bankruptcy.
The most common type of bankruptcy is Chapter 7 which involves liquidating assets to pay off creditors. The good thing is that most people can keep certain items that are essential such as their home and high-value vehicles. In addition, there’s a great chance that any court case that has been initiated in relation to unpaid debts will be stopped when an individual is declared bankrupt.
Most people who have a regular income can apply for Chapter 13 which allows them to create a plan that pays off their debts over the course of three to five years. The good thing is that it impedes creditors from trying to foreclose, seize or garnish wages during this time.
With a comprehensive and configurable bankruptcy processing solution such as Best Case by Stretto, loan service providers can automate the notification process for bankruptcy and keep track of changes to account information and enhance communication with attorneys. This powerful tool searches nationwide bankruptcy databases to discover changes automatically and inform clients https://brittandcatrett.com/2021/07/08/generated-post-2/ of any changes. It reduces risks and prevent unnecessary operating costs.
