Filing for bankruptcy can put a stop to the calls from creditors and many types of collection actions. Does this mean that it can also stop utility shutoffs caused by a backlog of late payments to the power or water company? The automatic stay triggered by bankruptcy can help with that, but it’s just a temporary measure. A Bergen County Chapter 7 bankruptcy lawyer from our firm can tell you what comes next.
Will Chapter 7 Bankruptcy Stop Utility Shutoffs?
Chapter 7 will trigger an automatic stay and prevent utility shutoffs. These companies cannot shut off your services or refuse to provide services just because you have filed for bankruptcy. If you owe them money, this will be addressed as you sell off assets and try to satisfy your creditors.
It is important to know that filing for bankruptcy only affects your previously accumulated debts. If you want your utility companies to continue providing services to you, you are going to need to address how you’ll make future payments to them. We’ll get to that in a second.
Can Chapter 13 Bankruptcy Stop Utility Shutoffs?
In Chapter 13 bankruptcy, you keep your assets. You instead make a payment plan that addresses any of your debts, like past-due utility bills, and agree to complete that payment plan over three to five years. Filing for Chapter 13 bankruptcy will also prevent utility shutoffs, for a little while at least.
How Long Do I Have to Negotiate With the Utility Company After Filing for Bankruptcy?
Once the bankruptcy process has begun, you need to talk to your utility companies and provide them with “adequate assurance” that you will be able to pay your future bills. You have just 20 days to do this.
You can take a few different approaches here. You can show them a letter of credit or a surety bond. You may also be able to make a cash deposit as a sign of good faith. If your assurance is accepted, then the utility company will keep providing services to you.
From here, you have to keep up with your payments. If you do not pay your future bills, you are risking utility shutoffs again.
Should I Hire a Lawyer?
We recommend hiring a lawyer when you are filing for bankruptcy. An experienced attorney can help guide you through the process and pick the best path toward financial relief. Whether you’re worried about creditors calling or utility shutoffs, we’re ready to assist you.
Schedule a Consultation Today
If you are considering bankruptcy, make sure that you have all the facts. Contact the Law Office of Boyd & Squitieri to schedule a consultation with our team. We could tell you more about this process and how we can help you with all the paperwork.
