06/06/2024

Bankruptcy Solutions – Why Bankruptcy Is The Last Resort

main differences between bancorp and whole bank

The decision to file bankruptcy isn’t one to be taken lightly and it’s typically a last resort option after having tried other debt relief solutions. Bankruptcy can ruin credit, impede access to loans, and lead to the loss of valuable items. It can also affect the future financial goals of the person, such as purchasing a car or home, getting an insurance policy or obtaining a job. Financial advisors recommend looking into alternative debt relief options before considering bankruptcy.

The most commonly used type of bankruptcy is Chapter 7 which involves liquidating assets to pay off creditors. The good thing is that the majority of people can keep essential possessions such as their home and high-value vehicles. In addition, any court action taken for unpaid bills will likely be stopped in the event of a person becoming bankrupt.

In general, people with a regular income can file for Chapter 13 which allows them to devise an arrangement that will pay off their debts over a period of three to five years. The best part is that it impedes creditors from trying to foreclose, seize or garnish wages during this time.

Loan servicers who use a customizable and complete bankruptcy processing system, such as Best Case by Stretto can automate bankruptcy notifications, track changes to account information, and improve communication with attorneys. This powerful tool searches nationwide bankruptcy databases to automatically discover changes and notify clients of any changes. It helps reduce risk and avoid unnecessary operating expenses.

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