Bankruptcy Solutions – Why Bankruptcy Is The Last Resort

It is crucial to realize that bankruptcy should not be viewed lightly. It is usually the last resort option after attempting other options to reduce debt. Bankruptcy can ruin credit, make it difficult to access loans, and cause the loss of valuable items. It can also hinder the future financial goals of the person, such as purchasing a car or home, obtaining a job and getting insurance. Financial advisors suggest exploring other debt relief options prior bankruptcy.

The most common 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 their main possessions, such as their house or a high-value car. Additionally any court action for unpaid bills will likely be stopped when a person is declared bankrupt.

In general, people with regular incomes are able to apply for Chapter 13 to create a plan to pay off debts in three to five years. It is important to know that creditors are not able to foreclose on your home, repossess your property, or garnish your wages during this time.

With a comprehensive and configurable bankruptcy processing solution like Best Case by Stretto, loan servicers can automate the notification process for bankruptcy and keep track of changes to account information and enhance communication with attorneys. This powerful tool scans nationwide bankruptcy databases in order to detect changes on a regular basis and inform clients of any changes. It helps reduce risk and reduce unnecessary operating costs.

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