It is essential to recognize that bankruptcy shouldn’t be taken lightly. It is typically the last resort option after attempting other ways to deal with debt. The bankruptcy process damages credit, limits the ability to borrow and could result in the loss of valuable items. It could also affect future financial goals, for example, buying a vehicle or home, obtaining an insurance policy or obtaining a job. Financial advisors advise exploring other debt relief options before https://brittandcatrett.com/2022/01/04/consumer-and-small-business-solutions bankruptcy.

The most common type of bankruptcy is Chapter 7 which involves liquidating assets to pay off creditors. The good news is most people are able to keep their essential items, such as their house or a high-value car. There’s also a good possibility that any court action that’s been commenced in relation to debts that are not paid will be stopped when the person is declared bankrupt.

In general, those who earn regular incomes are able to apply for Chapter 13 to create a plan to pay off their debts over three to five years. The good thing is that it impedes creditors from trying to foreclose, take possession of or garnish wages during this time.

Loan service providers who utilize a customizable and comprehensive bankruptcy processing software such as Best Case by Stretto can automate bankruptcy notifications, monitor changes in account data, and enhance communication with attorneys. This powerful tool searches extensive bankruptcy databases across the country to automatically detect and inform clients of any changes, helping them minimize risk and avoid unnecessary operational costs.