The decision to file bankruptcy is not one that should be taken lightly. It’s typically a last resort option that is used after trying other debt relief solutions. The bankruptcy process can damage credit, restrict the ability to borrow and could cause the loss of valuable possessions. It can also affect the future financial goals of the person, such as purchasing a car or home, getting an insurance policy check this link right here now or obtaining a job. Financial advisors advise exploring other debt relief options prior to bankruptcy.
The most well-known type of bankruptcy is Chapter 7 which involves liquidating assets to pay off creditors. The good news is most people can keep their primary possessions, such as their home or high-value vehicle. In addition any court action for unpaid bills is likely to be stopped in the event that a person goes bankrupt.
Generally, individuals with regular incomes can opt to make an application for Chapter 13 which allows them to create a plan to pay off their debts over the course of three to five years. The good thing is that it stops creditors from trying to foreclose, repossess or take wages as garnishments during this time.
With a complete and flexible bankruptcy processing tool like Best Case by Stretto, loan servicers can automate bankruptcy notification, monitor changes to account data and enhance communication with attorneys. This powerful tool searches extensive bankruptcy databases across the nation to automatically detect and inform clients of any changes, helping them minimize risk and avoid unnecessary operational costs.