Picture this. You come home and there is a utility shut off notice taped to your door. Suddenly, you’re facing the possibility of losing power, water, and access to the basic things that keep your life running. The panic sets in fast. But what if I told you there is a way to stop that from happening? Filing for bankruptcy can actually give you time to catch your breath and keep your essential utilities on.
What Is the Automatic Stay?
When you file for bankruptcy, whether it is Chapter 7 or Chapter 13, something called the automatic stay goes into effect immediately. This is a legal protection that puts an instant pause on collection efforts. That includes bill collectors and, yes, utility companies. If you are behind on payments, the automatic stay can give you the protection you need to restore your services and get your life back on track.
Utilities May Ask for a Deposit
While the automatic stay is powerful, it is not a permanent fix all by itself. Most utility companies will ask for something called adequate assurance. This is usually a cash deposit, a letter of credit, or some other form of guarantee that shows you intend to stay current moving forward. It is not about being perfect. It is about showing that you are willing and able to continue paying your utility bills after filing.
Bankruptcy Covers Past Bills, But You Must Stay Current Going Forward
Bankruptcy can wipe out or reorganize past due balances, but it does not excuse you from paying future bills. Any services you receive after your filing date must still be paid in full. These are called post-petition services. As long as you keep up with those payments, your utilities will stay connected and your services will continue without disruption.
Chapter 7 Versus Chapter 13
If you file under Chapter 7, your past due utility bills can often be discharged. The automatic stay goes into effect immediately, stopping collection efforts and giving you the breathing room you need. With Chapter 13,v your utility bills are included in a structured repayment plan approved by the court. The automatic stay still protects you, and you repay the debt over time with manageable monthly payments.
Bankruptcy Buys Time and Protects Your Peace of Mind
This is not just about stopping a shut off notice. Bankruptcy can give you the time and space you need to reorganize and rebuild. When you act early, you can protect your essential services and avoid the chaos that comes from losing power, gas, or water. At our firm, we believe that protecting your home and peace of mind should come first.
Schedule Your Free Consultation Today
If you are worried about a utility shut off or feel like you are running out of options, let’s talk. A free consultation could help you understand whether bankruptcy is the right move. You might find that filing gives you exactly the kind of pause you need to regain control of your finances and keep your lights on. Contact us today!