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Bankruptcy Solutions – Why Bankruptcy Is The Last Resort

It is essential to recognize that bankruptcy should not be viewed lightly. It is typically the last option available after having tried other ways to deal with debt. The bankruptcy process can damage credit, restrict access to loans, and can cause the loss of valuable items. It can also affect the future financial goals of the person, such as buying a car or home, getting an insurance or job. Financial advisors recommend looking into other debt relief options prior to bankruptcy.

The most commonly used 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 certain essential items like their homes and expensive vehicles. Additionally, there’s a good possibility that any court action that’s been commenced in relation to debts that are not paid will be halted once an individual is declared bankrupt.

Generally speaking, those with a regular incomes can opt to apply for Chapter 13 which allows them to devise a plan to pay off their debts over a period of three to five years. The good thing is that it blocks creditors from attempting to foreclose, repossess or garnish wages during this time.

With a robust and customizable bankruptcy processing software such as Best Case by Stretto, loan servicers can automate bankruptcy notification and monitor changes to account data and improve communication with attorneys. This powerful tool scans extensive national bankruptcy databases to discover and notify clients of any changes, allowing them to minimize risk and avoid unnecessary operational costs.

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