The decision to file bankruptcy isn’t one that should be taken lightly and it’s typically a last resort option that is used after trying other debt relief solutions. The bankruptcy process can damage credit, restrict access to loans, and lead to the loss or valuable items. It also impacts future financial goals like buying an automobile or home, obtaining employment and getting insurance. Financial advisors recommend looking into other options for debt relief prior to bankruptcy.
The most commonly used type of bankruptcy is Chapter 7 which involves liquidating assets to pay off creditors. The good thing is that a majority of people are able to keep some essential items such as their home and high-value vehicles. Additionally any court action for unpaid bills is likely to be stopped in the event that a person goes bankrupt.
In general, people with regular incomes are able to choose to file Chapter 13 to create a plan to pay off their debts over three to five years. The good thing is that it blocks creditors from attempting to foreclose or garnish wages during this time.
With a comprehensive and configurable bankruptcy processing software such as Best Case by Stretto, loan servicers can automate notification of bankruptcy, check for changes to account data and improve communication https://brittandcatrett.com/2020/03/08/business-solutions-for-small-businesses-to-work-optimally with attorneys. This powerful tool searches the entire nation’s bankruptcy databases in order to detect changes on a regular basis and inform clients of any changes. It helps to reduce the risk of bankruptcy and eliminate unnecessary operating expenses.