It is important to understand that bankruptcy shouldn't be viewed lightly. It is typically the last option available after attempting other options to reduce debt. Bankruptcy could ruin credit, limit access to loans, and could result in the loss or valuable items. It can also impact future financial goals like buying a home or car or job and getting insurance. Financial advisors recommend looking into other debt relief options prior bankruptcy.

Chapter 7 bankruptcy involves liquidating assets to pay creditors. The good thing is that a majority of people are able to keep certain items that are essential like their homes and valuable vehicles. Also, there's a high chance that any court case that's been commenced in relation to unpaid debts will be stopped when someone is declared bankrupt.

Generally speaking, those with a regular incomes may choose to make an application for Chapter 13 which allows them to devise a plan that pays off their debts over a period of three to five years. It is important to know that creditors are not able to be able to foreclose on your home, seize your property or garnish your paycheck during this time.

With a comprehensive and configurable bankruptcy processing solution like Best Case by Stretto, loan servicers can automate bankruptcy notification and monitor changes to account data and improve communication with attorneys. This powerful tool searches nationwide bankruptcy databases in order to automatically discover changes and notify clients of any changes. It helps reduce risk and avoid unnecessary operating expenses.