Utility shut-offs and the bankruptcy law

If you are behind on your utility bills, a bankruptcy case may be a solution to your problem.

Past due utility bills are dischargable in Chapter 7 bankruptcy cases.

If you have been threatened with an impending shut off of electric, gas, propane service, etc., bankruptcy will delay it and may prevent it altogether.

As soon as a bankruptcy case is filed, utilities are absolutely prevented from terminating your service the next twenty days. During that period they can negotiate with you (or your attorney, if you wish) for a deposit that ensures they will get paid for the future service. They are not required to impose a deposit on you, however, and some companies simply don’t bother to collect one. One way or the other, you will get continued service after the bankruptcy case is filed.

What you don’t want to do, however, is to start falling behind on utility bills again after you file. These bills can’t be discharged, and if you filed under Chapter 7, you can’t do another bankruptcy case for eight years. So, while you can eliminate your “past due” problem, you must be careful to budget for utility bills going forward.

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