Utilities and Bankruptcy

: Reese Baker & Associates

  Filed under: Debt

Filing bankruptcy can stop your utilities from being terminated by a process called the automatic stay. When you file your bankruptcy papers with the court, the automatic stay goes into effect. The court will inform your creditors of the bankruptcy, and they are prohibited by law from taking any legal action against you. Your creditors are to stop all collection attempts, repossessions, and foreclosures immediately.  This gives you time to make a plan to get your finances in a better situation. 

Twenty Days of Service

Filing bankruptcy will restore terminated utility service for at least twenty days. You may have to provide a security deposit to your utility company for future service after the twenty days. You will also need to keep your account current as you will not be able to get another bankruptcy discharge for seven years. You do not need to pay your utility bills before you filed bankruptcy. 

Bankruptcy Chapters

If you file Chapter 7 bankruptcy, your non-secured debt will be eliminated, which will give you more of your monthly income to pay your other bills such as your power and water.  If you have secured debt you are behind in payments too and would like to keep the collateral, Chapter 13 may be the best bankruptcy for your needs. In Chapter 13 you will have three to five years to make back payments to the court to be distributed to your creditors. At the end of the repayment period, all of your qualifying debt will be eliminated. 

If you are behind in your utilities and worry you will lose service, contact a McAllen bankruptcy attorney to find out how you can keep your services and get financial relief.