It is important to understand that bankruptcy should not be viewed lightly. It is typically the last resort option after attempting other debt relief options. Bankruptcy could ruin credit, impede access to loans, and cause the loss of valuable items. It could also affect future financial goals, such as buying a car or home, getting a job and getting insurance. Financial advisors suggest exploring other options to reduce debt before contemplating bankruptcy.
The most popular type of bankruptcy is Chapter 7 which involves liquidating assets to pay off creditors. The good news is that the majority of people can keep essential possessions like their homes and vehicles of high value. Additionally, there’s a good chance that any court proceeding that’s been filed in https://brittandcatrett.com/ connection to unpaid debts will be halted when an individual is declared bankrupt.
In general, those who earn regular incomes can opt to choose to file Chapter 13 to create a plan to pay off their debts within three to five years. It’s important to know that creditors cannot take over your home, seize your property or garnish your paycheck during this period.
Loan servicers that use a flexible and comprehensive bankruptcy processing software such as Best Case by Stretto can automate bankruptcy notifications, monitor changes to account data and improve communication with attorneys. This powerful tool scans nationwide bankruptcy databases to detect changes on a regular basis and notify clients. It reduces risks and prevent unnecessary operating costs.
