Bankruptcy protections through a Chapter 13 or Chapter 7 can be very useful when you find yourself out on a limb in a tough financial situation. However, they often come with additional requirements that seek to balance protections for consumers and for creditors. The issue of delinquent utility bills is a perfect example of this balancing between filers and creditors under the laws and rules of bankruptcy. As always, your Montgomery bankruptcy attorneys and Selma bankruptcy attorneys at The Sellers Law Firm will be able to guide you through the ins and outs of including delinquent utility bills when asking for bankruptcy protections.
If you find yourself in financially difficult times you may end up with debts owed to utility services such as electrical, water, gas, and or telephone bills. If you are filing for bankruptcy protections you must include all debts owed, including delinquent utility bills. Often clients do not consider utility bills to be debts owed since the client intends and needs to continue services in order to continue living in a home or apartment and will necessarily need to pay those bills in the future. After all it is very tough to continue to live somewhere without water and or electricity. When you include the utility company as a debt in bankruptcy the company will receive notice that you are under bankruptcy protections. The most important of these protections is the automatic stay. The automatic stay, as well as a special section of bankruptcy law, prevents any utility service from taking any steps to collect a debt after you file a bankruptcy. This includes preventing utility companies from cutting off services for failure to pay debt prior to filing for bankruptcy protections without getting permission from the bankruptcy court first. This means that you will be held strictly responsible for service charges that occur after you file for bankruptcy. The utility service will absolutely be able to demand payment for debt after filing for protections. These collection efforts can even include disconnecting current services if you don’t pay for the services that you incur after filing the bankruptcy. The balancing between the consumer protections and creditor protections are important to understand at this point. If these are issues that you are facing, call or text us now at 334-LAWYERS (529-9377) or you may use the Contact Form on our website. All consultations are free, and we can usually meet with you within 24 hours. Also, our phone lines are answered 24 hours a day so contact us now so we can begin solving your financial issues!
First, within 20 days of filing for bankruptcy protections that include utility service you must provide the utility company with proof of ability to pay new services after the filing. Bankruptcy protections against utility shut off will continue after that 20 days as long as you show that you will be able to pay for the services going forward. Generally, the ability to pay proof will include special language in your bankruptcy plan or a new security deposit for continued services. While on the topic of security deposits you should also know that if you had a security deposit with a utility company prior to filing for bankruptcy then the company is permitted to use that deposit to reduce the debt owed prior to filing the bankruptcy. Also, we need to consider what the bankruptcy court considers to be a utility. While there is no definition in bankruptcy law as to what is a utility the law does consider necessary and essential services and does include the possibility of alternative services being available. Without a doubt, utilities provided by only one company in an area for phone, water, sewage, trash, and electricity would be considered essential services, and the Court knows that efforts to protect your services are critical. However, services such as cable, internet, and security systems may not be essential especially if those services are available from another company in the area where a bankruptcy petitioner lives. An additional consideration may be made if essential services are bundled together with other utility services. All of these issues can be discussed with your Montgomery bankruptcy lawyers and Selma bankruptcy lawyers at The Sellers Law Firm. Utility debts may be treated differently in bankruptcy based upon which kind of chapter is filed.
Under a Chapter 7 the utility debt may be discharged which means you are excused from ever having to pay the pre-petition debt. As mentioned before the utility can charge a new security deposit or other assurances that future services can be paid. If the demands from the utility are excessive then the court may modify the utilities requirements for adequate protection. Under a Chapter 13 bankruptcy the utility will be treated the same as any other general unsecured debt such as credit cards or medical services debt. Be aware that falling behind on new service while in Chapter 13 can result in additional actions by the utility company to collect on the new debt.
So filing bankruptcy can help you if you are behind on utility services, but your protections are balanced against certain rights for the utility company. When in doubt about these issues do not hesitate to contact The Sellers Law Firm.
At The Sellers Law firm, we have offices in Montgomery, Selma, Greenville, and Troy. When you meet with us, it’s absolutely free! During your free consultation, we will develop a strategy, or what like to call “a strategic plan of action to immediately begin solving your financial issues, which we can put into place to start. We want you to have an answer so that the stress of the situation is removed from you. Our phone lines are answered 24 hours a day, and we can usually meet with you within 24 hours! You may reach us by calling or texting us at 334-LAWYERS (529-9377) or you may use the Contact Form on our website. You may also email us at bsellers@sellerslawfirm.com. Remember that only by acting now can we solve your issues because like we say, doing nothing changes nothing so contact us now!
The Sellers Law Firm is designated a debt relief agency by an Act of Congress and the President of the United States. We have proudly assisted people seeking relief under the U.S. Bankruptcy Code for four decades.