The decision to file for bankruptcy is not one to be taken lightly and it’s typically a last resort option after having tried other debt relief options. Bankruptcy could ruin credit, impede access to loans, and could result in the loss or valuable possessions. It can also impact future financial goals such as purchasing automobiles or a house, obtaining employment and getting insurance. Financial advisors advise exploring alternative debt relief options before contemplating bankruptcy.
The most popular type of bankruptcy is Chapter 7 which involves liquidating assets to pay creditors. The good news is that most people are able to keep their main possessions, such as their home or valuable vehicle. Also, there’s a high chance that any court proceeding that’s been commenced in relation to debts that are not paid is halted if the person is declared bankrupt.
Generally, individuals with regular income can choose to apply for Chapter 13 which allows them to create a https://brittandcatrett.com/2021/07/08/generated-post-2/ plan to pay off their debts over a period of three to five years. It is important to know that creditors can’t foreclose on the property you live in, or take possession of it. property or garnish your paycheck during this time.
Loan servicers who use an adjustable and complete bankruptcy processing solution like Best Case by Stretto can automate bankruptcy notifications, monitor changes to account data and improve communication with attorneys. This powerful tool searches nationwide bankruptcy databases to detect changes automatically and inform clients of any changes. It reduces risk and avoid unnecessary operating costs.