Bankruptcy Solutions – Why Bankruptcy Is The Last Resort

It is essential to recognize that bankruptcy should not be viewed lightly. It is typically the last option available after attempting other ways to deal with debt. Bankruptcy ruins credit, limits access to loans, and can result in the loss of valuable possessions. It also impacts future financial https://brittandcatrett.com/2020/03/28/small-business-is-the-best-start/ goals, such as buying automobiles or a house or obtaining a job, as well as getting insurance. Financial advisors suggest exploring alternative options for debt relief prior to contemplating bankruptcy.

The most common type of bankruptcy is Chapter 7 which involves liquidating assets to pay off creditors. The good thing is that a majority of people are able to keep essential possessions such as their home and vehicles of high value. In addition, any court action taken due to unpaid debts will likely be halted when a person is declared bankrupt.

In general, those with regular incomes are able to apply for Chapter 13 to create a plan to pay off their debts within three to five years. The good thing is that it prevents creditors from trying to foreclose, seize or make garnishments on wages during this time.

Loan servicers that use a configurable and comprehensive bankruptcy processing software such as Best Case by Stretto can automate bankruptcy notifications, track changes in account data, and enhance communication with attorneys. This powerful tool scans extensive nationwide bankruptcy databases to automatically find and notify customers of changes, helping them minimize risk and avoid unnecessary operational costs.