Bankruptcy Solutions – Why Bankruptcy Is The Last Resort

It is important to understand that bankruptcy shouldn’t be viewed lightly. It is typically the last option after attempting other ways to deal with debt. The bankruptcy process can damage credit, restrict the ability to borrow and could result in the loss of valuable possessions. It could also affect future financial goals such as buying a car or home, getting an insurance policy or obtaining a job. Financial advisors recommend exploring other debt relief options before bankruptcy.

The most common type of bankruptcy is Chapter 7 which involves liquidating assets to pay creditors. The good thing is that many people are able to keep their most important possessions, such as their home or valuable vehicle. Additionally, any court action taken due to unpaid debts could be halted in the event of a person becoming bankrupt.

Generally speaking, those with a regular incomes can opt to make an application for Chapter 13 which allows them to design an agreement to pay off their debts over a period of three to five years. The good thing is that it impedes creditors from trying to foreclose, repossess or make garnishments on wages during this time.

With a comprehensive and configurable bankruptcy processing tool like Best Case by Stretto, loan servicers can automate bankruptcy notification, monitor changes to account information and improve communication with attorneys. This powerful tool scans nationwide bankruptcy databases in order to detect changes automatically and notify clients. It helps reduce risks and prevent unnecessary operating costs.






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