One of the hardest things debtor’s face when dealing with debt is the question of how they are going to pay for simple services, such as gas and electricity. One way to deal with insurmountable debt is to file for bankruptcy. Below we discuss how to receive immediate relief through Chapter 7 bankruptcy. As always, it’s advised that you work with a phoenix chapter 7 bankruptcy that is familiar with various debt repayment options
Utility Service During Bankruptcy
Chapter 7 bankruptcy can provide immediate relief for debtors who are facing a utility shut-off of their gas, electricity, water, or even telephone. To do so, a debtor will need to provide proof that they will be able to pay future utility bills within 20 days of filing for bankruptcy protection. When you file for bankruptcy, a utility service is not able to alter, refuse, or discontinue your service because of deficient payments. Additionally, a utility company is not able to shut off or refuse to provide service to a debtor just because they filed for bankruptcy.
“Adequate Assurance” of Payment Within 20 Days
Within 20 days of filing a Chapter 7 bankruptcy, a debtor needs to provide their utility companies with what is called an “adequate assurance.” This states that a debtor will be able to pay future utility bills. Submitting an adequate assurance of payment will force the utility service to continue service. This will happen even if there is back-owed debt. It’s assumed that these back payments will be discharged through the bankruptcy. A debtor will need to get the utility company to agree that the payment assurance is adequate or ensure that a court has ordered the utility to accept the payment assurance.
Adequate assurance can be in the form of a letter of credit, cash deposit, certificate of deposit, surety bond, prepayment, or another form of assurance that a utility company and the debtor or the trustee have agreed to.
Working with a Bankruptcy Attorney
Bankruptcy can be an overwhelming process. That’s why we advise that you work with a phoenix chapter 11 bankruptcy that is familiar with various debt repayment options. We are committed to helping our clients understand their rights and options under the bankruptcy law and developing the debt relief solution that makes the most sense for each individual. We invite you to call (602) 648-3274 or contact our Arizona office to schedule a free initial consultation.
668 N. 44th St., Ste 320, Phoenix, AZ 85008