The decision to file bankruptcy isn’t one to be taken lightly and it’s typically a last resort option that comes after attempting other debt relief options. The bankruptcy process damages credit, limits the ability to borrow and could cause the loss of valuable possessions. It can also affect future financial goals like buying a car or home, obtaining a job and getting insurance. Financial advisors advise exploring alternatives to debt relief before contemplating bankruptcy.
Chapter 7 bankruptcy involves liquidating assets in order to pay creditors. The good news https://brittandcatrett.com/2022/01/04/risk-management-and-small-business/ is that a majority of people can keep their main possessions like their home or high-value vehicle. In addition any court action due to unpaid debts is likely to be stopped if a person becomes bankrupt.
In general, individuals with regular incomes can choose to make a Chapter 13 to create a plan to pay off debts in three to five years. The good news is that it blocks creditors from attempting to foreclose, repossess or the wages of employees during this period.
Loan servicers who use a customizable and comprehensive bankruptcy processing solution like Best Case by Stretto can automate bankruptcy notifications, track changes to account data and improve communication with attorneys. This powerful tool searches extensive bankruptcy databases across the country to automatically detect and inform clients of any changes, helping them minimize risk and avoid unnecessary operational costs.