Are you behind on your utility payments? Are you considering bankruptcy? If so, you may be wondering what will happen to your utility services after you file for bankruptcy. Here’s what you need to know:
Chapter 7 Bankruptcy
How does Chapter 7 work? A Chapter 7 bankruptcy is the most common form of bankruptcy. You do not need to enter a repayment plan under Chapter 7. Instead, any non-exempt property will be sold by the trustee to repay your creditors. This process is handled under the supervision of the court and in line with the Bankruptcy Code. However, the property that will qualify as exempt will depend on your state’s statutes. So, it is important to discuss your assets with your attorney prior to filing.
However, most debt that is unsecured and considered non-priority will be discharged through your bankruptcy. The good news is that utility bills are this kind of debt. This means that once your case is discharged, your utility debt will also be wiped out.
Chapter 13 Bankruptcy
A Chapter 13 bankruptcy is sometimes called a reorganization bankruptcy. In a Chapter 13 bankruptcy, you enter into a repayment plan and do not need to hand over any property. However, you must use your income to pay some or all of what you owe to your creditors over time — from three to five years, depending on the size of your debts and income.
Any utility bill debt that you have will be included in your unsecured, non-priority debt. For many Chapter 13 cases, you will only pay a portion of your unsecured debt through the plan. It is important that you keep up with your plan payments and remain current on your utility bills through this process.
What Happens to Your Utility Bills After Bankruptcy?
Once the bankruptcy is completed and discharged, you will need to continue making your regular utility payments. Your current or future payments cannot be removed through bankruptcy. Remember, if you fall behind on your utility payments post bankruptcy, your service will eventually be shut off.
Need More Information?
At the Law Office of Daniela Romero, we believe in relationships that are based on trust. Before we work together, we would like to get to know you and we would like you to get to know us. We want you to be sure you are the right fit for us and that we are the perfect fit for you. This will allow you to be completely comfortable sharing intimate and difficult details of your case, so we can offer you representation to the fullest extent of the law. Call us today to set up a free consultation.