The decision to file for bankruptcy is not one to be taken lightly and it’s usually a last-resort option that is used after trying other debt relief options. Bankruptcy could ruin credit, make it difficult to access loans, and could result in the loss or valuable possessions. It could also affect future financial goals, such as purchasing a car or home, obtaining an insurance policy or obtaining a job. Financial advisors recommend exploring alternative debt relief options before considering bankruptcy.
Chapter 7 bankruptcy involves liquidating assets to pay creditors. The good news is that the majority of people can keep certain essential items like their homes and high-value vehicles. Additionally, there’s a good possibility that any court action which has been filed in relation to unpaid debts is halted if a person is made bankrupt.
Generally speaking, those with a regular income can choose to make an application for Chapter 13 which allows them to devise a plan that pays off their debts over the course of three to five years. The good thing is that it prevents creditors from attempting to foreclose, take possession of or take wages as garnishments during this time.
With a comprehensive and configurable bankruptcy processing solution like Best Case by Stretto, loan service providers can automate bankruptcy notification, monitor changes to account data and enhance communication with attorneys. This powerful tool searches vast national bankruptcy databases to identify and notify clients of any changes, allowing them to minimize risk and avoid unnecessary operational costs.