The decision to file bankruptcy is not one to be taken lightly. It’s typically a last resort option after having tried other debt relief solutions. The bankruptcy process can damage credit, make it difficult to access loans, and could result in the loss of valuable possessions. It could also affect future financial goals, for example, buying a vehicle or home, obtaining an insurance policy or obtaining a job. Financial advisors recommend looking into alternatives to debt relief before contemplating bankruptcy.
The most https://brittandcatrett.com/2022/01/04/risk-management-and-small-business/ commonly used type of bankruptcy is Chapter 7 which involves liquidating assets to pay creditors. The good news is most people can keep their essential items like their home or expensive vehicle. There’s also a good chance that any court action which has been filed in relation to debts that are not paid is halted if an individual is declared bankrupt.
Generally, individuals with regular incomes may choose to file for Chapter 13 which allows them to create a plan to pay off their debts over the course of three to five years. It’s good to know that creditors can’t close on the property you live in, or take possession of it. property or garnish your paycheck during this period.
With a robust and customizable bankruptcy processing software such as Best Case by Stretto, loan servicers can automate notification of bankruptcy and monitor changes to account information and enhance communication with attorneys. This powerful tool scans extensive bankruptcy databases across the nation to automatically identify and notify clients of changes, helping them reduce risk and avoid unnecessary operational costs.