Filing for bankruptcy is a legal way to address overwhelming debt and have a fresh start. Still, in the face of financial hardship, the idea of losing water, electricity and gas during this tough time can add more stress. Is filing for bankruptcy worth the try if it could mean living in the dark?
You may be able to keep your utilities
The good news is that bankruptcy laws offer protection to ensure you can maintain essential services during and after your bankruptcy filing. This prevents utility companies from:
- Refusing or cutting off service just because you filed for bankruptcy
- Demanding payment for past-due bills as a condition for continuing service
- Altering their service, typically in the form of lowering its quality
File for bankruptcy immediately activates automatic stay. This prohibits creditors, including utility companies, from taking collection actions against you. However, this only remains active for a certain period.
Utility companies can still request that you provide “adequate assurance” or pay a security deposit within 20 days of your filing, guaranteeing that they will receive payment for future services. The amount of this deposit can vary, but it typically equals two months of your average bill.
What if you cannot pay for them
If you cannot pay the deposit, the utility company may have the right to discontinue your service. Still, there are ways to make sure that your utility services remain uninterrupted.
For one, you may negotiate with your provider for a lower deposit or a payment plan if you believe coming up with a security deposit would be difficult. Seeking help from local assistance programs for low-income households is also an option.
It is also advisable to get advice from a skilled bankruptcy lawyer who can guide you on how specific laws apply to your case.
