It is crucial to realize that bankruptcy shouldn’t be viewed lightly. It is usually the last resort option after attempting other options for debt relief. Bankruptcy ruins credit, limits access to loans and may cause the loss of valuable items. It also impacts future financial goals like buying an automobile or home and obtaining work insurance. Financial advisors suggest exploring alternative debt relief options before contemplating bankruptcy.
Chapter 7 bankruptcy involves liquidating assets in order to pay creditors. The good news is that most people can keep their most important possessions, such as their home or high-value vehicle. Also, there’s a high chance that any court proceeding that has been initiated in relation to unpaid debts will be halted once a person is made bankrupt.
Generally, individuals with regular income can choose to make an application for Chapter 13 which allows them to create an agreement to pay off their debts over a period of three to five years. The good news is that it blocks creditors from trying to foreclose, seize or garnish wages during this time.
With a complete and flexible bankruptcy processing tool like Best Case by Stretto, loan servicers can automate the notification process for bankruptcy, keep track of changes to account information and enhance communication with attorneys. This powerful tool searches extensive bankruptcy databases across the country to automatically find and notify customers of any changes, helping them reduce risk and avoid unnecessary operational costs.
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