Using Bankruptcy to Stop Utility Shut-offs

Memphis Bankruptcy, Social Security Disability & Long Term Disability Attorney

If you’re concerned about your financial situation, you may be wondering how you’re going to pay your past-due utility bills and if your utility services will be shut off. When you file for bankruptcy, you may be looking for a way to discharge or wipe out your debts and also wondering how bankruptcy affects your outstanding balance and payments on utility services.

If you are confused about the relationship between bankruptcy and overdue utility bills, seeking legal advice from a bankruptcy attorney may provide you with clearer answers. John Dunlap is an experienced attorney who is well versed in bankruptcy cases. Call today for a free 30 minute session to discuss the unique needs of your case

Can my Utility Company Shut Off Services if I File for Bankruptcy?

If you file for bankruptcy, you can also file for an automatic stay as part of your bankruptcy paperwork that will prevent creditors from calling you, mailing you, or collecting payments during your bankruptcy period. This includes stopping collections for utilities while you’re in the process of finalizing your bankruptcy. 

When you file the bankruptcy petition, your automatic stay is immediately put into place. This means that most collectors must cease all collection attempts. If you are behind on your utility bills and your utility provider is threatening to shut off your power, water, or telephone services, the automatic stay will stop the disconnect for at least 20 days. 

This gives you time to pay your utility bills while you are working out your bankruptcy case. If your utilities are disconnected or you are still being contacted about them during the 20 day period, your attorney may be able to help you. 

Utility Bills in Chapter 7 Bankruptcy

Chapter 7 bankruptcy is known to help eliminate or discharge many unsecured or nonpriority debts. Can utility bills be discharged in bankruptcy? In Chapter 7 cases, most utility bills, medical bills, and credit card bills are considered unsecured debts and will usually be discharged or wiped out at the end of the Chapter 7 bankruptcy period. 

Your utility charges may also be considered an unsecured or nonpriority debt. Your outstanding utility bills may be discharged at the end of your Chapter 7 bankruptcy, allowing you to start your finances fresh at the end of bankruptcy. 

Utility Bills in Chapter 13 Bankruptcy

Bankruptcy protection varies depending on the type of bankruptcy.

Chapter 13 bankruptcy offers a repayment plan to those who file and qualify. Over the Chapter 13 period, your debts are reorganized and placed into an approved repayment over a long period of time. Like other bankruptcies, your utility bills may be included as part of your nonpriority, unsecured debts that will be repaid over a set period of time via a payment plan. 

However, in a Chapter 13, you may only pay off a portion of your unsecured debts. You may be able to pay off some of your past due utilities in your repayment plan and keep your utilities on throughout the bankruptcy repayment plan. Your current utilities are still due during your payment period but the Chapter 13 bankruptcy process allows you to rebuild credit and payment history with your utility company. 

Worried your utilities will be shut off? Call us today

John Dunlap is an experienced attorney that has dealt with many bankruptcy cases. If you want to discuss your bankruptcy filing and how it impacts your utility bills, call for a free 30 minute session