Does Bankruptcy Erase Utility Bills?

/in , , /by

The decision to file for any form of bankruptcy is not easy, but if you are dealing with unmanageable or overwhelming debt, bankruptcy is a way to gain some financial breathing room. If you owe a great deal on past due utility bills, a chapter 7 bankruptcy can help you liquidate these debts. A chapter 13 bankruptcy can help you restructure these debts. If you’re facing a utility shutoff, it’s important to file before that happens.

Utility Bills Are an Unsecured Debt

Unlike a debt that is backed by collateral, such as your home or your car, a utility bill is an unsecured debt. If you have made a deposit on your utilities, you may lose it in the process of filing for bankruptcy.

However, you will be protected against shutoff once you file. You may be required to pay an additional deposit after filing. If this is left unpaid, it is possible that you may face a utility shutoff. Work with your bankruptcy attorney to make sure you pay at least the required minimum deposit, post-filing, to keep your lights, heat and water turned on.

The information regarding your unpaid utility bills will be applied to your means test. Because you have to pass a means test to qualify to file bankruptcy, it’s critical that you have all of this information with you when you and your attorney work through the filing information. Your bankruptcy filing process will be less painful if you have all of your debt information included in the filing.

Do I Have to List Unpaid Utility Bills When I File for Bankruptcy?

Because utility bills are an unsecured debt, they need to be included in your bankruptcy filing. Depending on the type of bankruptcy you’re filing, you may be required to restructure the debt and pay at least a portion of it back.

Once you’ve filed for either a chapter 7 or a chapter 13 bankruptcy, you’ll be protected from the calls of creditors. You’ll also be protected from shutoff. You should be protected from these accounts being sent to collections, though outstanding debts that have been sent to collections will still need to be addressed.

Will Filing for Bankruptcy Wipe Out Unpaid Utility Bill Debt?

If you file a chapter 7 bankruptcy, it’s likely that your unpaid utility bill debt will be completely wiped out. As noted above, you may lose your previously paid deposit and you may be required to pay another one in the time allotted after you file for bankruptcy.

If you file a chapter 13 bankruptcy, the unpaid utility bills may be included in the restructure of your debts. Previously paid deposits may be retained by the utility company and another may be required, but you will have time to address the debts.

For those who are being contacted by utility companies for unpaid debts, one of the biggest benefits of any bankruptcy filing is that those call will now be directed to your bankruptcy attorney’s office, rather than your home.

Understanding the Protections of Each Form of Bankruptcy

Chapter 7

A chapter 7 bankruptcy is also known as a liquidation bankruptcy. You can get free of the pressure of unsecured debts, such as credit cards and utility bills, but you will not be protected from repossessions. If your income is simply not enough to cover your bills and your possessions are not extensive, filing a chapter 7 is a fairly quick way to get out from under the pressure of that debt.

There is an income restriction for those who choose to file a chapter 7. You will need to present information about your income from all sources as well as your debts when you start your filing process.

Be aware that a chapter 7 will stay on your credit record for 10 years. It should not take more than 6 months to file and complete the steps of a chapter 7 bankruptcy.

Chapter 13

When you file a chapter 13 bankruptcy, you’re asking for a chance to restructure your debt while getting protection from your creditors. You will be protected from repossessions and foreclosures, but you will be required to participate in a repayment program that will tie up any extra income for up to 5 years.

As a general rule, filing a chapter 13 bankruptcy is the best option for higher income filers. If you’re working to save items bought with secured debt, such as your home and vehicles, a chapter 13 bankruptcy can give you time and a structure. Depending on your location, you will be allowed to keep a vehicle to get to work and your home in the restructure.

A chapter 13 bankrupty will take longer to file; you will need to complete the repayment process to fully discharge your chapter 13. This bankruptcy will stay on your credit report for 7 years.

In the process of filing a chapter 13, you will be provided with guidelines of what monies from your income you can keep for your use. The cost of the repayment plan can be challenging. These restrictions on your spending and your repayment plan will last from 3 to 5 years.

Because the repayment plan can be quite onerous, it’s important to be sure that you’re ready to undertake this effort. For solo filers, the hard work of a chapter 13 can be a source of tremendous stress. For couples, working through a chapter 13 bankruptcy can put a lot of pressure on the relationship.

Keeping the Lights On

If you’re facing overdue bills that you can’t pay and are dealing with the threat of shutoff, it’s worth considering a chapter 7 or chapter 13 bankruptcy. The overall amount of your debt, both secured and unsecured, needs to be carefully considered before you file. The value of the possessions you need to protect will also come into play, and your income will have a large impact on the form of bankruptcy you choose to file. Your attorney can help you make the best decision for your financial future.

Utility Bills & Bankruptcy

/in , , , /by

Have you ever opened your utility bill to find an unpleasant surprise? Utility bills can sneak up on you when you least expect it.

The good news is that there are laws in place to protect you if utility bills become unaffordable. You have options like payment plans, reduced rates, or, in extreme cases, declaring bankruptcy to eliminate utility bill debt.

How Utility Bills Can Lead to Debt and Bankruptcy

Utility bills are annoying monthly expenses that can add up over time if left unpaid.
• Late fees and interest charges. Most utility companies charge late fees if not paid on time, usually within 15-30 days of the due date. These fees may average $20-$50 per bill. Unpaid balances often incur high-interest charges, sometimes over 20% APR.
• Service disruption. Failure to pay your utility bills will result in service disconnection. Having your power, water, or gas shut off due to nonpayment can be dangerous and lead to additional fees to restore services.
• Damage to your credit. Unpaid utility bills are reported to the credit bureaus and will hurt your credit score. A few missed payments can drop your score by 100 points or more. Bad credit makes qualifying for loans, credit cards, and insurance difficult.

Utility Shutoff: Know Your Rights Before Services Are Disconnected

Utility companies can disconnect your services for nonpayment, but there are laws protecting consumers. Know your rights before the lights go out.

Notice Required

Utility providers must present a written notice before disconnecting services. The information will state the reason for the utility shutoff and the earliest dates it may occur.

Exceptions Made

Specific consumers qualify for protection from immediate disconnection. This includes those with medical issues where loss of service would be life-threatening.

Knowing your rights can help avoid the headache of utility shutoffs. Don’t hesitate to ask your service providers questions about managing or disputing your bills. Protecting access to essential services is important, especially if money is tight. With communication, reasonable payment plans, and exercising your consumer rights, you can stay connected even when times are tough.

How Are Utility Bills Handled in Chapter 7?

Utility bills don’t just disappear because you’ve filed for bankruptcy. In a Chapter 7 bankruptcy, any utility bills incurred before you file are considered unsecured debts and are typically discharged – meaning you are no longer legally obligated to pay them. However, any bills for service after you file must be paid on time and in full.

Falling behind on current utility bills can cause serious problems. The utility company may require a large deposit to continue or restore services. They could even disconnect your utilities altogether for nonpayment. To avoid issues, set up payment plans with your utility providers immediately after filling for bankruptcy. Be upfront about your situation, and negotiate affordable payment terms to catch up on the past due amounts.

You’ll also want to adjust your utility usage and budget. Look for ways to cut costs by lowering thermostat, turning off lights or electronics when not in use, using fans instead of AC whenever possible, etc. See if you qualify for utility assistance programs that offer discounts for low-income households.

Some individuals fear that filing for bankruptcy may make it difficult to establish new utility services. However, utility companies cannot deny you service solely due to bankruptcy. They can, however, require a deposit for new services based on your payment history and credit score. The good news is bankruptcy will not directly affect your ability to access necessities like power, water, phone, and internet.

With some practical steps, you can ensure your utility needs are met during and after a Chapter 7 Bankruptcy. Communicate openly with your providers, reduce usage costs where possible, and utilize available assistance programs. While bankruptcy eliminates responsibility for past debts, staying current on ongoing bills and maintaining good payment habits after filing will help make the transition to a fresh financial start as smooth as possible.

How Are Utility Bills in Chapter 13 Bankruptcy Handled?

When you file for Chapter 13 Bankruptcy, your utility bills are handled differently than other debts. Utility companies provide essential services, so they are given special treatment under Chapter 13.

How Utility Bills Are Paid

Your utility bills, like gas, electricity, water, and phone services, are considered “priority debts.” This means that you must continue paying them during the bankruptcy. Your Chapter 13 plan will specify the amounts you must pay each month. If you fall behind, the utility company will request permission from the court to disconnect your service.

To ensure uninterrupted utility service:
1. Contact your providers as soon as you file for bankruptcy.
2. Explain that you’ve filed for Chapter 13 and will continue making payments as part of your repayment plan.
3. Provide details about the amounts and due dates specified in your plan.
Most companies will work with you as long as you make the payments you agreed to.

Some utility companies may require a deposit to continue or restore services. Your bankruptcy trustee can request a waiver or reduction of the deposit as part of your repayment plan.

Budgeting for Essential Bills

When creating your Chapter 13 plan, make enough budget to cover all priority debts, including utilities, in full and on time. If payments cannot be made, contact trustee and utility providers immediately to request an adjustment to prevent disconnection.

Keeping your utility services connected during bankruptcy is critical. By communicating with your providers, paying as agreed in the plan, and making adjustments when necessary, you can ensure uninterrupted essential services while you repay creditors through your Chapter 13 plan.

Strategies to Avoid Bankruptcy When Facing Utility Debt

When facing mounting utility bills debt, bankruptcy is the only option. However, there are several strategies you can try first to avoid bankruptcy.

Payment Plans

Contact your utility providers and request payment plans to repay the debt over time. They would rather work with you than cut off the service or force bankruptcy. Ask if they offer budget billing to even out payments or if they waive late fees as you pay down the balance.

Reduce Usage

The less you use, the lower your bills will be. Turn off lights and electronics when not in use, wash only loads of dishes and laundry, unplug devices like gaming consoles, and lower thermostats in winter.

Assistance Programs

Utility companies offer assistance programs for those having trouble paying bills. They provide grants, bill payment plans, and ways to improve energy efficiency.

Filing for Bankruptcy

When utility bills start piling and you cannot pay them, bankruptcy may seem the only option. Filing for bankruptcy can provide relief from utility bills and other unsecured debts. However, it’s not a decision to take lightly and will have consequences.

Filing for bankruptcy should be an absolute last resort. While it can eliminate utility bill debts and provide relief, it will damage your credit for up to 10 years, making it difficult to open new accounts or borrow money. Bankruptcy should only be considered if you have financial hardship you can’t overcome.

High utility bills are no joke and can quickly become unmanageable, severely damaging households. While bankruptcy may seem like an easy way out, it should be the last resort. Ensure you’ve explored all your other options, like reducing usage, payment plans, subsidiaries, or loans. Your finances and credit are too essential to make this decision lightly.

Does Bankruptcy Prevent Utility Shutoff?

/in , , , /by

When your financial situation is overwhelming, it can happen that you fall behind on your regular bills, like utility payments. Being threatened with having your power cut off is really disturbing, and it may prompt you to think about the different ways you can deal with your money troubles. One thing that undoubtedly comes to mind is bankruptcy. Bankruptcy is a way of eliminating unsecured debt, and back utility bills fall into that category. If you are overdue on utility bills and are in danger of a shutoff, filing for Chapter 7 or Chapter 13 bankruptcy creates a bankruptcy stay that prohibits this shutoff for gas and electric. There are specific steps you need to take, though, in order for the power to remain on.

How It Works

As soon as you file a petition to begin the bankruptcy process, your utilities cannot be shut off for 20 days. It’s best if you complete all the bankruptcy paperwork at the same time that you submit the petition, but if you can’t, then be sure to do it within 14 days. That 20 day utility shutoff prevention period gives you almost 3 weeks of breathing room, and the professionals at Burr Law will be there to help you strategize your next moves.

What Happens With Your Utilities

The utility company (WE Energies) will send you a deposit letter approximately 20 days after filing the bankruptcy petition. You are required to pay this deposit. This is really important! If you do not pay it, then the utility company will shut you off. You need to pay the deposit and pay your gas and electric bill on time and in full for the next twelve months. These are the bills for the monthly usage, not the past due amounts. At the end of that 12 month period, the utility company will refund your deposit with interest.

Past Due Amounts Eliminated

A Chapter 7 bankruptcy takes anywhere from 3 to 6 months and at the end of it, all your unsecured debts will be discharged. That means that any past due amounts you owe to your utility company will be completely discharged (along with credit card debt, medical debt, and other unsecured debts). So bankruptcy will definitely prevent your utilities from being cut off for 20 days, and it can provide you a way to get rid of the debt you owe entirely.

Should You File or Not

Filing for bankruptcy is a big decision and if your primary concern is your utility bills, it is likely that a less radical solution can be found. When you have mounting medical debt, credit card debt, and other obligations along with your utility bills, then bankruptcy may be your best option. You can always consult with the professionals at Burr Law to clarify your situation.

If you are worried about your utilities being shut off, or feeling overwhelmed with financial difficulties, contact the professionals at Burr Law. You don’t need to struggle through it alone. We’re here to help.

Worried About Utility Shutoff?

/in , /by

The moratorium stopping utilities from disconnecting power went into effect on March 24, 2020, but it is ending April 15, 2021. If you have utility bills that you have been unable to pay and cannot see how you will be able to pay them, then you are once again facing the possibility of a utility shutoff. There are a number of options that you can pursue to avoid this, including declaring bankruptcy.

Negotiate Agreement With Company

You can try to negotiate a payment plan with the utility company. Wisconsin Energy (WE) should be able to arrange a Deferred Payment Agreement with you. Wisconsin law requires them to offer you such an agreement if you can’t pay your bill in full. Of course, this means that you need to be able to adhere to the payment plan. That’s difficult if you’re out of work, or have other financial obligations demanding your attention.

Access Government Programs

The Wisconsin Home Energy Assistance Program (WHEAP) administers the federally funded Low Income Home Energy Assistance Program (LIHEAP) and Public Benefits Energy Assistance Program. The goal of WHEAP and its related services is to help Wisconsin households reduce their energy burden. Because of COVID-19, it is now available throughout the year. For more information on WHEAP, call 1-866-HEATWIS (432-8947).

Appeal to Charities and Nonprofits

There are a number of charities that you can turn to for help with your utility bills. Catholic Charities and the Salvation Army are good places to start. There’s also a nonprofit organization dedicated to this work called Keep Wisconsin Warm/Cool Fund (KWW/CF) that is available throughout the state to low-income households. Finally, there are a number of community partnerships that you could explore.

Bankruptcy

Filing for bankruptcy is a big decision and if your primary concern is your utility bills, it is likely that a less radical solution can be found. When you have mounting medical debt, credit card debt, and other obligations along with your utility bills, then bankruptcy may be your best option. You can always consult with the professionals at Burr Law to clarify your situation. As far as utility shutoffs are concerned, here are some facts and resources for you.

Bankruptcy Filing Has Immediate Effect

As soon as you file a petition to begin the bankruptcy process, your utilities cannot be shut off for 20 days. It’s best if you complete all the bankruptcy paperwork at the same time that you submit the petition, but if you can’t, then be sure to do it within 14 days. That 20 day utility shutoff prevention period gives you almost 3 weeks of breathing room, and the professionals at Burr Law will be there to help you strategize your next moves.

Your Utilities During Bankruptcy

The utility company (WE Energies) will send you a deposit letter approximately 20 days after filing the bankruptcy petition. You are required to pay this deposit. If you do not pay it, then the utility company will shut you off. You need to pay the deposit and pay your gas and electric bill on time and in full for the next twelve months. At the end of that 12-month period, the utility company will refund your deposit with interest.

Your Utilities And Bankruptcy Discharge

A Chapter 7 bankruptcy takes anywhere from 3 to 6 months and at the end of it, all your unsecured debts will be discharged. That means that any back money you owe to your utility company will be eliminated (along with credit card debt, for instance). So bankruptcy will definitely prevent your utilities from being cut off for 20 days; and it can provide you a way to get rid of the debt you owe.

For questions about utility shutoff or any other topic related to bankruptcy, contact the experienced bankruptcy attorneys of Burr Law Office today.

Gas Meter Utility Shutoff

Utility Shutoffs: Learning From Wisconsin Bankruptcy

/in , /by

It’s easy to take certain things for granted, especially when you’re preoccupied with your fight to stay ahead of debt. If you’re like many people, you might be completely unprepared for the harsher realities of life — like when your lights or heat get turned off.

Nobody should find themselves forced to go without life’s necessities, but the citizens of Wisconsin often end up in precisely such situations. Fortunately, you can file for protection, and with the right legal assistance, getting utilities after bankruptcy should be no sweat.

Bankruptcy’s Utility Advantages

Dealing with creditors often gets messy, and utilities are no exception. When the power company decides that it’s going to turn off your supply due to your nonpayment of bills, it can back you into a corner.

Filing for bankruptcy expands your options. By giving you an automatic stay that halts collections, it lets you make vital decisions without quite as much weight on your shoulders. It also offers other benefits, such as ensuring that your creditors have to go through official channels to get in touch with you — It’s much easier to negotiate with the help of a lawyer.

The protections that you receive by petitioning the court for bankruptcy don’t just exist in name. For instance, the power company is legally prohibited from turning off your electricity because you filed. They also have to give you more options for discharging what you already owe.

How Might Your Wisconsin Bankruptcy Play Out?

As countless debtors have discovered firsthand, bankruptcy cases have become regular features in the Wisconsin legal landscape. The good news is that these proceedings may shed some light on what to expect when filing and dealing with utility creditors.

For instance, the notorious Shopko bankruptcy case exemplifies the kind of back and forth that some filers face. In late May 2019, a judge threw out the company’s proposed plan to pay its debt. This development goes to show that even though bankruptcy is designed to protect the filing party, it still has to satisfy the needs of everyone else involved, including the creditors.

In all likelihood, your case will be more straightforward, but it ultimately depends on your legal team. For instance, getting utilities after bankruptcy might be harder if you fail to prove that your income falls within a range that qualifies you as a consumer experiencing a hardship situation that’s worthy of relief. Planning an argument and gathering the evidence to portray yourself in the right light is crucial to moving your case forward.

Bankruptcy may be a good option for anyone struggling to keep their lights or power on in Wisconsin. If you want to file successfully, however, you’ll need to toe the line — From meeting the filing deadlines to attending the required hearings, seeking bankruptcy takes work and a dedicated legal team.

Although getting utilities after bankruptcy is indeed possible, your experience depends on whether you can build the right legal foundation. Improve your filing odds by chatting with a member of Burr Law Office. Get a free bankruptcy evaluation, call (262) 827-0375 today.

bankruptcy and utility bills

Bankruptcy and Utility Bills: The Secret to Avoiding a Shutoff?

/in , /by

When you can’t access the basic things you need to survive, everything gets harder. Losing power is no exception, and when your utilities get shut off due to nonpayment, bouncing back may seem like an impossible trial.

If you live in Wisconsin, you have certain rights when your gas or electric service is about to be discontinued. While many people are familiar with the laws designed to prevent utilities from putting consumers through life-threatening situations, you may not realize that your ability to fight back goes even further.

What do bankruptcy and utility bills have to do with each other? Here’s how filing might make life easier and what to do next.

Understanding Your Legal Status and Rights

Wisconsin law imposes a moratorium on certain utility shutoffs during the coldest part of the year. From Nov. 1 to April 15, the state’s gas and electric providers aren’t allowed to disconnect people for things like having fallen behind on their bills. (Date is wrong on website)

Ideally, this law would protect all Wisconsin residents, but as with so many regulations, there are loopholes. For instance, the utility company doesn’t have to reconnect your power if it got turned off before the moratorium period began. This means that you’ll find yourself in a bind if a sudden cold snap catches you off guard.

Other options designed to assist you in tough times may not be as helpful as they seem. For instance, although the Wisconsin Home Energy Assistance Program offers emergency services, such as fuel aid and co-payment plans, these programs are limited. Due to the number of applicants, it may take time to get the ball rolling. Your income has to be at or below 60 percent of the median level for the state, and the program is only designed to pay for a portion of your heating. You might easily find yourself ineligible if you experienced sudden debt, such as after a medical emergency.

Bankruptcy May Be a Better Choice

When aid programs and consumer protection laws fail, where can you turn? In reality, bankruptcy and utility bills aren’t totally unrelated — Taking your case to court could keep your family and household safe in the face of extreme weather conditions.

Filing for bankruptcy does a few things. In addition to letting the court know that your financial situation has gotten out of control, it gives you instant protection. This automatic stay is a pause that lasts while your case is working through the system, and it temporarily stops creditors, utility companies and other parties from taking further action against you in pursuit of the money you owe them.

Taking this route also gives you more leeway to make good on your overdue bills. Your utility company will forward you a letter requesting a deposit about 20 days after you file, and if you pay it, life will continue as usual regardless of whether the court decides to award you bankruptcy protection. What’s more, you’ll get the deposit back — plus interest — if you keep paying on time during the next year. If you don’t pay the deposit, however, you’ll lose power or gas.

Exercise All of Your Options

While 20 days might not seem like much, the extra time can be a massive help. If you file with the help of a lawyer, you also increase your chances of winning protection, which will erase your previous debts and make it easier to get back on top of life. To find out more about dealing with this kind of emergency, Call (262) 827-0375 to get in touch with a Burr Law Office specialist.

electric meters

Fighting for Your Rights: Utility Shutoff Laws and Bankruptcy

/in , /by

Safe shelter and protection from the environment are more than convenient privileges: They’re fundamental necessities. Unfortunately, energy companies don’t always seem to view things this way. If you don’t pay, they’re more than willing to shut off the gas or electricity services that help your family survive.

If you live in Wisconsin, can filing for bankruptcy protect you from such dire outcomes? Here’s what you need to know.

Bankruptcy and Utility Shutoffs

Bankruptcy isn’t just for stopping collection agencies from hounding you. In addition to putting an automatic hold on collection activities, filing for Chapter 7 bankruptcy in Waukesha can help you keep the heat going and the lights on.

Timing is key to using bankruptcy to avoid a utility shutoff. Once you file, you have just 20 days to prove that you’ll pay your future bills.

Knowing Your Rights When Filing for Bankruptcy

The laws against turning off electricity during bankruptcy are part of federal law. According to 11 U.S. Code § 366, utilities aren’t allowed to treat you unfairly just because you filed. This law means they can’t alter your service terms, refuse to serve you or discontinue your existing service.

What Happens After 20 Days?

After the 20-day period ends, the utility can only refuse, discontinue or change your service if you haven’t given them proof of your payment ability. In most cases, this means forking over a cash deposit, prepayment, credit letter, deposit certificate or surety bond. Different utility companies have their own standards for what kinds of payment assurance they prefer.

It’s also worth noting that this payment is for your future service, not the overdue bills. In other words, filing for bankruptcy may help you clean the slate and move forward.

What Happens to Your Old Account Balance?

One nice aspect of the legal code is that it lets you discharge, or erase, your old bills. If you file successfully and convince the court that you deserve bankruptcy status, the judge may wipe out what you currently owe. Although you’ll still have to pay your upcoming bills, you might be able to escape the burdens of digging yourself out from under a mountain of debt.

Special State Rules

Wisconsin also has some applicable laws against turning off electricity that may affect your case. For instance, in Wisconsin utilities are prohibited from disconnecting service to non-paying customers between November 1 and April 15.

Wisconsin also maintains the same 20-day payment window rule for accounts in non-bankruptcy cases. In these situations, however, the clock starts ticking when you receive the bill.

Should You File for Bankruptcy?

The laws against turning off electricity apply to Chapter 7 and Chapter 13 bankruptcy proceedings. However, keeping the gas, water or power connected should never be your only reason for filing.

Seeking bankruptcy status is most powerful when it’s part of a complete debt-management strategy. The most effective filings help you keep your head above water by addressing all of your liabilities. In other words, it’s smartest to discuss your situation with a reputable, experienced legal adviser.

Connect with a lawyer who’s ready to fight tirelessly on your behalf. Get in touch with the Burr Law Office team to learn more. You can also contact a Milwaukee bankruptcy lawyer by texting (262) 720-8783.