Falling behind on utility bills can add to the stress of financial hardship, especially when you're already dealing with other debts. If you're considering bankruptcy in Missouri, it's natural to wonder how filing might impact your gas, water, and electric services. Will they be shut off? Can old balances be cleared? Here's what you need to know about how utility bills are handled during bankruptcy and how to protect your essential services.
How Bankruptcy Affects Past-Due Utility Bills
When you file for bankruptcy, the automatic stay takes effect immediately. This court order temporarily stops most collection efforts, including threats to disconnect utilities due to nonpayment. Past-due utility bills are treated as unsecured debt, which means they may be:
- Discharged in Chapter 7, relieving you of the obligation to pay balances that existed before your filing date.
- Included in a Chapter 13 repayment plan, allowing you to repay past-due amounts over time.
It's important to note that only utility debts incurred before the bankruptcy filing are eligible for discharge or inclusion in a payment plan.
Can Utility Services Be Disconnected?
The automatic stay offers short-term protection, preventing utility companies from disconnecting your service for at least 20 days after filing. This includes essential services like:
- Electricity
- Natural gas
- Water
To continue receiving service beyond that window, the utility provider may require you to submit a deposit. This is a common request and is permitted under bankruptcy law as a form of assurance for future payments.
What About Utility Bills After Filing?
While bankruptcy may eliminate certain unpaid utility balances, you are still responsible for paying all new charges going forward. Staying current on these bills is important—missing future payments could result in disconnection once the automatic stay ends or if the utility is granted permission by the court.
To stay on track:
- Review your budget to include monthly utility costs.
- Make consistent payments to avoid service interruptions after filing.
Steps to Take When Filing Bankruptcy in Missouri
To protect your utility services throughout the bankruptcy process, consider these steps:
- Notify utility companies promptly. Let them know about your bankruptcy filing and provide your case number.
- Be prepared to pay a deposit if requested. This helps prevent service interruptions.
- Create a post-filing budget that prioritizes ongoing utility payments alongside other living expenses.
With some planning, you can continue to receive essential services as you work through your financial recovery.
Talk to Licata Bankruptcy Firm About Your Options
At Licata Bankruptcy Firm, we understand how financial challenges can affect every part of your daily life, including your utilities. Our Springfield-based team is ready to guide you through the bankruptcy process and help you understand what to expect when it comes to managing unpaid bills.
If you're exploring bankruptcy and have questions about your utility obligations, call us at (417) 213-5006 to schedule a free consultation and learn more about your options.