The decision to file for bankruptcy isn’t one to be taken lightly. It’s typically a last resort option that’s used after attempting other debt relief solutions. The bankruptcy process can damage credit, restrict access to loans and can cause the loss of valuable items. It can also impact future financial goals like buying cars or homes or obtaining a job, as well as getting insurance. Financial advisors suggest exploring alternative options for debt relief prior to contemplating bankruptcy.

The most popular type of bankruptcy is Chapter 7 which involves liquidating assets to pay creditors. The good thing is that most people can keep certain essential items such as their home and vehicles of high value. Also, there’s a high chance that any court action that check this link right here now has been initiated in relation to debts that are not paid will be halted when an individual is declared bankrupt.

Generally speaking, those with a regular income can choose to file for Chapter 13 which allows them to devise an agreement to pay off their debts over the course of three to five years. The good news is that it prevents creditors from attempting to foreclose or make garnishments on wages during this time.

Loan servicers who use a configurable and comprehensive bankruptcy processing solution like Best Case by Stretto can automate bankruptcy notifications, track changes in account data and improve communication with attorneys. This powerful tool scans nationwide bankruptcy databases in order to detect changes automatically and inform clients of any changes. It helps minimize risk and avoid unnecessary operating expenses.