Sadly, your current financial standing may have you struggling to pay your monthly bills, including your monthly credit card bills, housing bills, and namely, utility bills. You may be so behind on your payments that your utility company threatens to shut off your electricity, water, gas, and/or telephone. If your situation ever gets to this point, you must not hesitate to file for Chapter 7 bankruptcy. This is because the Kentucky bankruptcy court may offer certain protections that no one else can. Follow along to find out whether an automatic stay can prevent utility shutoffs and how a proficient Louisville, Kentucky Chapter 7 bankruptcy lawyer at Schwartz Bankruptcy Law Center can step in.

Is it possible for an automatic stay to prevent utility shutoffs?

First of all, an automatic stay is an injunction on your creditors that stops them from pursuing any collection activities for your past-due payments. The Kentucky bankruptcy court may impose this order as soon as it receives your petition for Chapter 7 bankruptcy. Unfortunately, an automatic stay may not apply to your past-due utility bills.

However, another section of the United States Bankruptcy Code may cover this. Specifically, the code states that your utility company cannot alter, refuse, or discontinue your services due to past-due payments once the court receives your Chapter 7 bankruptcy petition. In addition, your utility company cannot conduct such activities simply because you filed for bankruptcy to begin with.

To effectively execute this, you must supply your utility company with adequate assurance that you can, and intend to, pay your future utility bills. Such assurance may be given in the form of a cash deposit, a prepayment, a letter of credit, or otherwise. Importantly, you must do so within 20 days of your bankruptcy filing date. Otherwise, your utility company may proceed with shutting off your services.

Lastly, outside of bankruptcy, the state of Kentucky offers several programs to help you pay your utility bills. As an example, there is the Low-Income Home Energy Assistance Program (LIHEAP), which is a federally-funded program. Given your current financial standing, this may be worth looking into.

What can an automatic stay possibly protect me from?

Unlike the steps you need to take to prevent utility shutoffs, an automatic stay may require no additional effort on your part. Without further ado, an automatic stay may possibly protect you from the following:

  • It may curb your creditors from taking legal action against you.
  • It may curb your creditors from foreclosing on your property.
  • It may curb your creditors from enforcing a lien against your property.
  • It may curb your creditors from repossessing your property as collateral.

If you require immediate legal representation, look no further than a talented Louisville, Kentucky consumer bankruptcy lawyer. Someone at Schwartz Bankruptcy Law Center will be happy to serve you.