It is important to understand that bankruptcy shouldn’t be taken lightly. It is typically the last option available after having tried other options to reduce debt. The bankruptcy process can damage credit, restrict access to loans, and result in the loss or valuable items. It also affects future financial goals such as purchasing an automobile or home or obtaining a job, as well as getting insurance. Financial https://brittandcatrett.com/2020/03/08/business-solutions-for-small-businesses-to-work-optimally advisors suggest exploring other options to reduce debt before considering bankruptcy.

The most popular type of bankruptcy is Chapter 7 which involves liquidating assets to pay creditors. The good thing is that most people can keep some essential items such as their home and high-value vehicles. Additionally any court action due to unpaid debts will likely be halted in the event of a person becoming bankrupt.

Generally speaking, those with a regular income can make an application for Chapter 13 which allows them to devise an agreement to pay off their debts over the course of three to five years. It’s important to know that creditors will not be able to foreclose on your home, seize your property, or garnish your wages during this time.

The loan servicers who utilize a customizable and complete bankruptcy processing solution like Best Case by Stretto can automate bankruptcy notifications, monitor changes in account data, and enhance communication with attorneys. This powerful tool searches across the nation’s bankruptcy databases in order to automatically discover changes and notify clients of any changes. It helps minimize risks and prevent unnecessary operating costs.