The decision to file for bankruptcy isn’t one to be taken lightly and it’s typically a last resort option after having tried other debt relief options. Bankruptcy ruins credit, limits access to loans, and can cause the loss of valuable items. It can also hinder the future financial goals of the person, such as purchasing a car or home, getting an insurance or job. Financial advisors recommend exploring other debt relief options prior bankruptcy.

The most popular type of bankruptcy is Chapter 7 which involves liquidating assets to pay off creditors. The good thing is that the majority of people can keep certain items that are https://brittandcatrett.com/2022/01/04/consumer-and-small-business-solutions essential such as their home and valuable vehicles. Additionally, any court action taken due to unpaid debts will likely be stopped if a person becomes bankrupt.

In general, people with regular incomes can opt to make a Chapter 13 to create a plan to pay off their debts in three to five years. It is important to know that creditors will not close on your home, seize your property or garnish your wages during this period.

With a robust and customizable bankruptcy processing software such as Best Case by Stretto, loan servicers can automate the notification process for bankruptcy, monitor changes to account data and enhance communication with attorneys. This powerful tool searches extensive bankruptcy databases across the country to automatically discover and notify clients of changes, helping them minimize risk and avoid unnecessary operational costs.