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It is important to understand that bankruptcy shouldn’t be viewed lightly. It is typically the last option after having tried other debt relief options. The bankruptcy process damages credit, limits access to loans and can cause the loss of valuable items. It can also impact future financial goals like buying a home or car or obtaining a job, as well as getting insurance. Financial advisors advise exploring alternative debt relief options before considering bankruptcy.
The most popular type of bankruptcy is Chapter 7 which involves liquidating assets to pay off creditors. The good news is that a majority of people are able to keep some essential items like their homes and high-value vehicles. Additionally, any court action taken regarding unpaid bills could be halted in the event that a person goes bankrupt.
Most people who have a regular incomes can opt to file for Chapter 13 which allows them to devise a plan that pays off their debts over the course 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 wages during this time.
Loan servicers who use an adjustable and complete bankruptcy processing system like Best Case by Stretto can automate bankruptcy notifications, monitor changes in account data and improve communication with attorneys. This powerful tool searches the entire nation’s bankruptcy databases to discover changes automatically and notify clients. It helps minimize risk and avoid unnecessary operating expenses.