How To Keep Your Utilities On During Bankruptcy
Can My Utilities Be Shut Off During Bankruptcy?
Not right away, but you need to take steps to make sure your utilities stay on even if you can’t afford to pay your bills.
What qualifies as a utility?
- Gas (Heating and AC)
Section 366(a) Protection
There’s a part of the U.S. Bankruptcy Code (section 366a) that stops a utility company from shutting off your service if you can’t afford to pay your bills. This section allows your utilities to stay on even if you owe a lot of previous payments (which would be wiped out if you file for Chapter 7 bankruptcy).
However, new utility bills attained after you file for bankruptcy must be paid.
The 20-Day Rule
There’s one catch: After you file for bankruptcy, you have 20 days to let your utility companies know that you’ll pay future bills. This can be done with:
- A cash deposit or prepayment
- A certificate of deposit
- A letter of credit
- A surety bond
What about other bills that aren’t considered utilities? You may owe other payments like loans, rent, mortgage or credit card payments. During bankruptcy filing, the court will order an automatic stay, which tells the lenders and other companies to not contact you to ask for payment. This is to help take the stress out of constant billing calls.
Want to take more stress out of the bankruptcy process? Give us a call. We’ll walk you through every step and make sure your utility bills are handled to benefit you the most.
This article should not be taken as legal advice. If you’re considering bankruptcy or another legal debt relief option, you need to consult an attorney for guidance. If you’re in New Jersey and seeking legal assistance, we can help you.
Brenner Spiller & Archer, LLP is a New Jersey law firm that is dedicated to helping families find relief from the burden of debt and other financial woes. For more than 35 years, our bankruptcy lawyers have provided effective guidance on all debt relief matters to clients throughout Central and South Jersey.