The decision to file bankruptcy is not one that should be taken lightly. It’s typically a last resort option that is used after trying other debt relief solutions. Bankruptcy can ruin credit, limit access to loans, and can cause the loss of valuable possessions. It can also hinder future financial goals, for example, buying a vehicle or home, obtaining an insurance policy or obtaining a job. Financial advisors recommend looking into other debt relief options prior bankruptcy.
The most well-known type of bankruptcy is Chapter 7 which involves liquidating assets to pay off creditors. The good news is that most people can keep some essential items such as their home and valuable vehicles. Additionally any court action for unpaid bills will likely be halted in the event of a person becoming bankrupt.
Most people who have a regular incomes may choose to make an application for Chapter 13 which allows them to create an agreement to pay off their debts over a period of three to five years. The good thing is that it impedes creditors from attempting to foreclose, take possession of or the wages of employees during this period.
With a robust and customizable bankruptcy processing solution such as Best Case by Stretto, loan service providers can automate the notification process for bankruptcy, monitor changes to account data and improve communication with attorneys. This powerful tool scans extensive nationwide bankruptcy databases to automatically discover and notify clients of changes, helping them minimize risk and avoid unnecessary operational costs.