It is crucial to realize that bankruptcy should not be taken lightly. It is typically the last option available after having tried other ways to deal with debt. Bankruptcy could ruin credit, impede access to loans, and result in the loss or valuable items. It also affects financial goals like buying an automobile or home and obtaining work insurance. Financial advisors suggest exploring other debt relief options before bankruptcy.
The most well-known type of bankruptcy is Chapter 7 which involves liquidating assets to pay creditors. The good news is that a majority of people are able to keep some essential items such as their home and valuable vehicles. Additionally, any court action taken due to unpaid debts will likely be stopped in the event that a person goes bankrupt.
In general, those with regular incomes are able to apply for Chapter 13 to create a plan to pay off debts in three to five years. The best part is that it stops creditors from trying to foreclose, take possession of or the wages of employees during this period.
With a flexible and comprehensive bankruptcy processing tool like Best Case by Stretto, loan service providers can automate the notification process for bankruptcy, monitor changes to account data and enhance communication with attorneys. This powerful tool searches the entire nation’s bankruptcy databases to discover changes automatically and inform clients of any changes. It helps reduce the risk of bankruptcy and eliminate unnecessary operating costs.
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