It is essential to recognize that bankruptcy shouldn’t be viewed lightly. It is typically the last resort option after attempting other debt relief options. The bankruptcy process can damage credit, restrict access to loans, and could result in the loss or valuable possessions. It could also affect the future financial goals of the person, for example, buying a vehicle or home, obtaining an insurance policy or obtaining a job. Financial advisors recommend exploring other debt relief options before bankruptcy.
Chapter 7 bankruptcy involves liquidating assets in order to pay creditors. The good news is that the majority of people can keep certain items that are essential such as their home and valuable vehicles. Additionally, any court action taken regarding unpaid bills will likely be stopped if a person becomes bankrupt.
Generally speaking, those with a regular income can choose to make an application for Chapter 13 which allows them to come up with a plan that pays off their debts over a period of three to five years. It is important to know that creditors can’t close on your home, seize your property or garnish your paycheck during this period.
With a flexible and comprehensive bankruptcy processing solution like Best Case by Stretto, loan service providers can automate bankruptcy notification, monitor changes to account data and improve communication with attorneys. This powerful tool scans nationwide bankruptcy databases in order to detect changes automatically and notify clients of any changes. It helps to reduce risk and avoid unnecessary operating costs.
