\When struggling to make ends meet, it can seem as if each piece of mail is a bill. You may be working hard to find a higher paying job, managing your health and medical expenses, or working toward improving your business – when Duke Energy or another utility company sends you a letter demanding money you do not have.
Falling behind on water, electricity, garbage and other necessities is one of the most stressful financial situations you will find yourself in. Threats to discontinue essential services are a real hardship to you and your family.
Fortunately, you have options in bankruptcy that can get you back on financial track and back in good standing with your utility providers.
During bankruptcy, utility companies may not shut off essential services because of past due amounts, so long as they are listed as creditors in your bankruptcy case. Federal law prohibits utility companies from discontinuing service to you because you declare bankruptcy.
Utility bills are usually dischargeable through bankruptcy. If you cannot pay your past-due utility bills, Chapter 7 bankruptcy may relieve you of the obligation to pay them. In a Chapter 13 bankruptcy, your debts are reorganized so that you can create a manageable payment plan. You will pay only as much as you can afford to of your past utility bills, and in many cases a portion (even a significant portion) of your past due bills will be forgiven at the end of the repayment plan.
Through either Chapter 7 or Chapter 13, you are able to get out from under overwhelming utility bills, along with other liabilities, and get back on track financially. The benefits of bankruptcy can improve your finances (and your mental and physical health) almost immediately.
In bankruptcy, the court issues an “automatic stay” to creditors, meaning that they must stop collection actions once the case is filed. For example, credit card companies cannot call you for repayment and utility companies cannot threaten to cancel service.
When a utility bill is included in a bankruptcy, the utility company starts a new account. They may request a deposit for the new account which is allowed under bankruptcy law. This does not mean you have to pay back the full amount you owe on the old accoun .
You will also have to continue to make monthly payments on-time and in full for new charges you acquire during your bankruptcy.
While the law is generally clear on the options you have regarding utility bills in your bankruptcy, the appropriate action for you will depend on the type of bankruptcy you file, the amount you owe on your utilities, and other creditors in the bankruptcy proceedings. It is best to discuss your individual situation with an experienced bankruptcy attorney to best understand your options moving forward.
The Rose Law Office is a debt relief agency and bankruptcy law firm with office locations in Cincinnati and Colerain. Contact our office if you would like to discuss your particular debt issue or legal question.
