Case Study: Streamlining Bankruptcy Management with Spectrum

The Challenge

Bankruptcy is one of the most complex and labor-intensive processes lenders face. While bankruptcies may only represent 2–5% of a portfolio, they often consume 20% or more of operational effort. Without the right tools, lenders rely on manual processes that are:

• Time-consuming: Constantly logging into external systems (like PACER) to track case updates.
• Error-prone: Re-keying details across systems, risking outdated or inaccurate records.
• Difficult to scale: As bankruptcy cases accumulate over time, manual management becomes unmanageable.
• Compliance risk: Failing to meet a deadline or update borrower status can have serious legal and financial consequences.

A Day in the Life Without Automation

A typical bankruptcy specialist must:

• Monitor external sources for new filings.
• Manually record case details and key court dates.
• Repeatedly check for updates such as dismissals, reaffirmations, or discharges.
• Ensure that borrower communications, payments, and account handling follow bankruptcy rules.
• Track cases for months or even years until they are resolved.

The result: a small number of bankruptcies consume a disproportionate share of staff time and effort.

The Spectrum Difference

Spectrum helps lenders simplify and control the bankruptcy process by:

• Customer-Level Tracking: Recording bankruptcies at the customer level and automatically associating all relevant accounts.
• Workflow & Queues: Routing tasks to the right specialists, ensuring nothing falls through the cracks.
• Activities & Pilots: Tracking important deadlines and case statuses with structured automation.
• Trustee Payment Handling: Identifying and applying trustee payments correctly to accounts.
• Lifecycle Visibility: Supporting the full bankruptcy lifecycle, from pending filings through reaffirmations, dismissals, or discharges.

Enhanced Case Management

Spectrum offers a centralized platform to manage bankruptcy cases from start to finish. Lenders can access all critical information in one place, including bankruptcy filings, court documents, communication history, and relevant financial data. This improves transparency, enables quick responses to court deadlines, and reduces the risk of manual entry errors.

The system integrates regulatory requirements directly into workflows, helping lenders remain fully compliant with federal guidelines. Built-in audit trails document every action taken throughout the bankruptcy process, giving lenders confidence in their compliance posture.

Communication and Collaboration

Bankruptcy management involves many stakeholders, including lenders, borrowers, attorneys, and court officials. Spectrum facilitates secure messaging, document sharing, and real-time updates, so every party has access to the most current information. This ensures coordinated action and reduces communication delays that can slow down case progress.

Automated Workflows

Spectrum leverages predefined rules to automate routine tasks such as:

• Filing notifications
• Customer communications
• Court data retrieval
• Document filing

This level of automation reduces the risk of errors, improves efficiency, and allows bankruptcy specialists to focus on strategic work instead of repetitive manual steps.

Bankruptcy Scrub and Monitoring

Bankruptcy monitoring is fully integrated into existing workflows. New accounts are scrubbed upon onboarding to ensure no filings are overlooked, and filings are matched daily to provide instant notifications for every relevant bankruptcy. Notifications are linked to follow-up actions, like docket monitoring, claims filing, and reaffirmation agreements.

Advanced Case Monitoring

With advanced docket event monitoring, lenders receive real-time notifications of critical case events. This next-generation monitoring technology gives teams the visibility and agility they need to respond quickly and accurately throughout the bankruptcy lifecycle.

Proof of Claim Management

Spectrum streamlines the Proof of Claim process, allowing lenders to:

• File claims directly through a connected form
• Liquidate claims with a click
• Track all claim activities in a single dashboard

This integration reduces administrative burden and improves claim accuracy, helping lenders maximize recoveries.

Reaffirmation Automation

Lenders can automatically generate and submit reaffirmation agreements for Chapter 7 bankruptcies without staff intervention. Automated tracking of milestones and notifications ensures that reaffirmation processes remain compliant and efficient, improving the likelihood of successful outcomes.

Compliance and Cost Reduction

By automating and standardizing workflows, Spectrum helps lenders reduce operational costs and maintain compliance with ease. With fewer manual tasks, bankruptcy teams can manage growing caseloads without increasing headcount, therefore delivering significant cost savings and operational resilience.

Continuous Innovation

Through Shaw Systems’ partnership with BankruptcyWatch, lenders have access to the latest bankruptcy technology, updated weekly. This ensures continuous enhancements in case monitoring, data analytics, and automation, helping institutions stay ahead of regulatory changes and industry trends.

The Results

By moving from manual bankruptcy management to Spectrum, lenders achieve:

• Efficiency: Bankruptcy teams spend less time re-keying and chasing data.
• Accuracy: Reduced risk of errors, missed deadlines, and compliance issues.
• Scalability: Handle growing bankruptcy caseloads without adding staff.
• Portfolio Control: Better insight into which accounts are affected and how they should be managed.
• Regulatory Confidence: Audit trails and automated workflows support full compliance.
• Transparent Reporting: Spectrum comes with standard bankruptcy reporting. Additionally, Spectrum allows lenders to easily build custom reports, providing complete visibility into the health and accuracy of your team’s bankruptcy management.