The decision to file for bankruptcy isn’t one to be taken lightly and it’s typically a last resort option that comes after attempting other debt relief solutions. Bankruptcy can ruin credit, impede access to loans, and could result in the loss or valuable possessions. It can also impact future financial goals such as purchasing a home or car or obtaining a job, as well as getting insurance. Financial advisors recommend exploring other options for debt relief prior to bankruptcy.

Chapter 7 bankruptcy involves liquidating assets to pay creditors. The good thing is that a majority of people are able to keep essential possessions such as their home and expensive vehicles. Also, there’s a high chance that any court action that has been initiated in relation to debts that are not paid will be halted once an individual is declared bankrupt.

In general, individuals with regular incomes can opt to choose to file Chapter 13 to create a plan to pay off debts in three to five years. It is important to know that creditors cannot be able to foreclose on your home, take possession of your property or garnish your wages during this period.

With a complete and flexible bankruptcy processing software such as Best Case by Stretto, loan service providers can automate notification of bankruptcy and keep track of changes to account information and enhance communication with attorneys. This powerful tool searches nationwide bankruptcy databases to automatically discover changes and inform clients. It reduces risk and reduce unnecessary operating costs.

main differences between bancorp and whole bank