It is important to understand that bankruptcy should not be viewed lightly. It is typically the last resort option after attempting other ways to deal with debt. The bankruptcy process can damage credit, restrict access to loans, and could result in the loss or valuable possessions. It also affects future financial goals, such as buying an automobile or home or obtaining a job, as well as getting insurance. Financial advisors suggest https://brittandcatrett.com/2021/07/08/generated-post exploring alternative debt relief options before considering bankruptcy.

The most commonly used type of bankruptcy is Chapter 7 which involves liquidating assets to pay creditors. The good news is that most people can keep certain essential items like their homes and valuable vehicles. Also, there’s a high chance that any court proceeding that’s been filed in connection to unpaid debts will be stopped when someone is declared bankrupt.

In general, those who earn regular incomes may choose to make a Chapter 13 to create a plan to pay off their debts over 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.

With a complete and flexible bankruptcy processing solution like Best Case by Stretto, loan servicers can automate notification of bankruptcy, monitor changes to account data and improve communication with attorneys. This powerful tool searches vast nationwide bankruptcy databases to automatically detect and inform clients of any changes, allowing them to minimize risk and avoid unnecessary operational expenses.