As the warmer weather approaches, some families face the prospect of having their utilities shut off for nonpayment. In many states a winter moratoriums run from November through the end of March (State Disconnection Rules), so as April approaches, some may lose power if they are running behind on their utility bills.
Oftentimes an inability to keep up with utility bills is part of a larger financial struggle. Fortunately, Chapter 7 bankruptcy can provide immediate relief to those who are in danger of having their gas, electric, water, or even their telephone services, discontinued.
If you have fallen behind on payments to a utility company, filing bankruptcy can prevent the utility from altering, refusing or discontinuing service (11 U.S. Code §366 – Utility service) . However, it is important to note that it is a temporary reprieve. Typically a customer has only a couple of weeks after filing to provide the utility with assurances that they can pay future bills so the utility does not act.
Filing bankruptcy can wipe out past due utility bills along with credit card and medical debt. In fact, most types of unsecured debt will be discharged in a Chapter 7 bankruptcy. For those who have limited income, carry debt, and have few assets, Chapter 7 bankruptcy protection is a strategy worth considering.
If you have the means to make payments to get caught up and have assets you do not wish to give up in a chapter 7, you may want to consider a chapter 13 repayment plan. Chapter 13 bankruptcy repayment plans run anywhere from 3 to 5 years and any unsecured debt remaining following the repayment plan is typically discharged. Keep in mind that whether you choose to file chapter 7 or chapter 13, you must keep up with your current utility payments to avoid disconnection.
If you are facing a difficult financial situation that has you worried about utility shut off, call the bankruptcy law offices of Charles E. Covey for immediate assistance at 309-674-8125 or send us an email and we will call you.
