The check it out decision to file for bankruptcy isn’t one that should be taken lightly and it’s typically a last resort option that’s used after attempting other debt relief options. The bankruptcy process can damage credit, restrict access to loans and can cause the loss of valuable possessions. It could also affect future financial goals such as buying a car or home, obtaining an employment and getting insurance. Financial advisors recommend looking into 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 the majority of people can keep some essential items such as their home and vehicles of high value. In addition, there’s a great chance that any court case which has been filed in relation to debts that are not paid will be halted once a person is made bankrupt.
In general, people with regular incomes can choose to choose to file Chapter 13 to create a plan to pay off their debts within three to five years. The good thing is that it stops creditors from trying to foreclose, take possession of or make garnishments on wages during this time.
Loan service providers who utilize a customizable and comprehensive bankruptcy processing software like Best Case by Stretto can automate bankruptcy notifications, monitor changes in account data and improve communication with attorneys. This powerful tool searches vast bankruptcy databases across the nation to automatically find and notify customers of any changes, allowing them to reduce risk and avoid unnecessary operational expenses.