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If you are like one of the hundreds of thousands of Americans who have gotten in over your head with credit card debt and other financial obligations, you may have looked into bankruptcy. While bankruptcy is a great way to get a fresh financial start, you should only use it as a last-resort option, as bankruptcy can have a devastating impact on your credit. SmartAsset explains the four signs it is time for you to declare bankruptcy in Florida.

The first and most obvious sign it is time for you to file bankruptcy is the fact that you cannot afford your monthly bills. Whether due to job layoff, an illness or an injury, if you find yourself charging everything to your credit cards and filing for personal loans to keep a roof over your head and food on your table, bankruptcy may be the only way to get a fresh start.

If debt collectors have begun to garnish your wages because of your failure to repay your debt, you can protect your earnings by filing bankruptcy. Once you file bankruptcy, the bankruptcy courts place an automatic stay on your accounts. This means collectors can no longer pursue what you owe, thereby providing you with financial relief and peace of mind.

If your collectors threaten to sue you, filing for bankruptcy may be your only other option. Typically, creditors will only sue if their phone calls and letters go unanswered. However, if your situation gets to the point of a lawsuit, you may face a losing battle. If you choose to take the case to court and lose, you will not only have to pay the amount owed plus interest, but also, you will have to cover the court costs and attorney fees. Again, filing bankruptcy places an automatic stay on collections actions and grants you peace of mind.

Finally, if you are in danger of losing your home, you may want to consider filing for bankruptcy. You can keep your home in a Chapter 13 filing so long as you keep up with your monthly repayment plan.

You should not use the information in this article as legal advice. It is for educational purposes only.