It is important to understand that bankruptcy shouldn’t be taken lightly. It is typically the last option after having tried other debt relief options. Bankruptcy ruins credit, limits access to loans, and can result in the loss of valuable items. It can also impact future financial goals such as purchasing a car or home, obtaining an employment https://brittandcatrett.com/2020/03/08/business-solutions-for-small-businesses-to-work-optimally and getting insurance. Financial advisors advise exploring other options for debt relief prior to bankruptcy.
Chapter 7 bankruptcy involves liquidating assets to pay creditors. The good news is most people are able to keep their main possessions, such as their home or high-value vehicle. Also, there’s a high chance that any court action that’s been commenced in relation to unpaid debts will be stopped when the person is declared bankrupt.
In general, people with a regular income can choose to file for Chapter 13 which allows them to devise an agreement to pay off their debts over the course of three to five years. It is important to know that creditors can’t take over your home, repossess your property or garnish your wages during this period.
Loan servicers that use a configurable and comprehensive bankruptcy processing software such as Best Case by Stretto can automate bankruptcy notifications, track changes in account data, and enhance communication with attorneys. This powerful tool scans nationwide bankruptcy databases in order to discover changes automatically and notify clients. It helps minimize the risk of bankruptcy and eliminate unnecessary operating expenses.