The decision to file bankruptcy isn’t one to be taken lightly. It’s typically a last resort option that is used after trying other debt relief solutions. The bankruptcy process can damage credit, restrict the ability to borrow and could result in the loss of valuable possessions. It could also affect future financial goals such as purchasing a car or home, getting a job and getting insurance. Financial advisors recommend exploring alternative options for debt relief prior to considering bankruptcy.
The most well-known type of bankruptcy is Chapter 7 which involves liquidating assets to pay off creditors. The good thing is that many people are able to keep their main possessions like their home or valuable vehicle. Additionally any court action due to unpaid debts will likely be stopped when a person is declared bankrupt.
In general, individuals with regular incomes are able to apply for Chapter 13 to https://brittandcatrett.com/2021/10/20/intralinks-appropriate-tool-for-usage create a plan to pay off their debts within three to five years. The best part is that it blocks creditors from attempting to foreclose, take possession of or garnish wages during this time.
Loan servicers who use a flexible and comprehensive bankruptcy processing solution like Best Case by Stretto can automate bankruptcy notifications, track changes to account information, and improve communication with attorneys. This powerful tool scans extensive national bankruptcy databases to identify and notify clients of any changes. This helps them reduce risk and avoid unnecessary operational expenses.