If you have creditors and others coming after you for past-due payments, filing for bankruptcy can often put a stop to that. Some of our clients wonder if filing can also stop utility shutoffs. The answer to that question is yes, but there are also some other things that you should consider before taking advantage of the automatic stay that this process offers. You should meet with a New City bankruptcy attorney to find out if this is the best option for you.
Will Bankruptcy Stop Utility Shutoffs?
Filing for Chapter 7 bankruptcy will trigger an automatic stay. This will stop creditors from pursuing payments, and that includes utility companies. Once you have filed they cannot alter, refuse, or stop your services. So the automatic stay can stop utility shutoffs.
Chapter 13 bankruptcy will also stop shutoffs. So either option will allow you to address your debts without having to worry about losing power or water to your home. You are going to have to address your debts soon though.
How Long Do I Have to Pay My Utility Company?
Once you have filed for bankruptcy, the utility company has to wait 20 days before it can take actions like shutting off your service. In that time, you have to make the case that you will be able to pay your future bills. If you do not do that, then you could have your power or water shut off.
In order to stop utility shutoffs, you must provide “adequate assurance” to the utility companies that you will be able to pay them in the future. What a company will accept as adequate assurance can vary. A letter of credit, a cash deposit, or some kind of surety bond could work. A lawyer can advise you on your best options.
Do I Have to Keep Making Utility Payments?
Once you have filed for bankruptcy, you need to continue to make payments to the utility company. Your past debt is going to be addressed through the bankruptcy process, but if you want to keep receiving services from utility companies you are going to have to pay for them.
A Chapter 7 bankruptcy could allow you to sell a number of assets and pay off the debt you owe to a utility company. A Chapter 13 bankruptcy allows you to make a payment plan so that you can pay off that debt over time. No matter which option you pick, your bankruptcy only addresses these past expenses. You must make all future payments on your own if you want to avoid utility shutoffs.
Contact Our Bankruptcy Attorneys
If you are considering filing for bankruptcy, talk to an attorney first. Contact the Lauterbach Law Firm and schedule a consultation with our team. We can tell you more about how you could potentially benefit from the bankruptcy process and whether it’s the right fit for your situation.