Can Filing Chapter 7 Bankruptcy Stop a Utility Shut-Off in New York City?

Can Filing Chapter 7 Bankruptcy Stop a Utility Shut-Off in New York City?

While an unpaid utility bill won’t usually justify filing bankruptcy on its own, filing Chapter 7 will prevent a utility shut-off in New York City.  Chapter 7 will give you immediate help if you expect your gas, water, electricity or even telephone and internet from being turned off for non-payment.  The relief is temporary, but it will give you 20 days from the time of your filing to prove that you will be able to come up with the money to pay your future utility bills.  You may need to provide “adequate assurance” in the form of a letter of credit or cash deposit to the utility company in order to keep the utilities on permanently.  The good thing is if you provide this “adequate assurance” to the utility company they are required to continue your service indefinitely even though the money you owe them in back payments will be eliminated in your bankruptcy case.  You can basically wipe the past debt clean if you promise to start paying your utility bills again moving forward.

Although similar to the “automatic stay” provision in bankruptcy, preventing utility shut off is actually protected under another part of the US Bankruptcy Code.  Utilities are considered to be a little different from your other unsecured debts, and you are given special protection in bankruptcy from utility creditors coming after you for past bills.  These companies are also prevented from showing any prejudice against you, meaning that unlike some creditors they can’t refuse to work with you for the simple fact you filed bankruptcy.

Unpaid utility bills are usually a symptom of bigger financial troubles.  If you can’t pay the house bills then it’s likely your behind on your credit card bills, car payments or mortgage as well.  As part of the big picture your utility bills are just some of the many debts that will be eliminated with Chapter 7.  Bankruptcy is intended to give you a fresh start on all of your debts.  There are some consequences, but if you can’t even keep the lights on now then things are probably pretty bad already.  Our clients keep their cars, homes and valuable assets in bankruptcy.  It’s not a guessing game; we know what results to expect for your case before filing your petition.

If you are expecting a utility shut off any moment, and think bankruptcy could help with your overall debt troubles contact a qualified bankruptcy attorney in New York City right away.  Even if they are coming to turn the power off tomorrow we can file an emergency petition today, in about 20 minutes, to force them to keep the service on.   If you have questions about bankruptcy and utility bills, it won’t hurt to get the free advice you need.  If you live in New York City contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free consultation today.  We only practice bankruptcy law and maintain a 99% Chapter 7 bankruptcy discharge record in New York City as of 8/31/16.

**** DISCLAIMER: This article is intended for educational purposes only. By reading no attorney-client relationship has been created. Prior results do not guarantee a similar result for future clients