Texas Bankruptcy Blog : Texas Bankruptcy Lawyer & Attorney : Fears Nachawati law Firm : Chapter 7, Chapter 13, Consumer Bankrutpcy : Dallas, Fort Worth, Austin, Houston, San Antonio

For families in financial difficulty, sometimes paying for even the most basic things is a struggle. Fortunately, the bankruptcy code protects debtors from the disconnection of necessary utilities like water, electricity or gas services. Specifically, a utility company may not alter, refuse, or discontinue service to an existing customer solely because either (1) the customer filed for bankruptcy protection; or (2) the customer failed to pay a pre-petition debt to the utility.

However, this protection is limited. Within 20 days after the bankruptcy filing the debtor must give the utility company "adequate assurance of future payment." This assurance is usually in the form of a new security deposit. The law allows the utility company to keep any previous security deposit and apply that deposit to your prior bill. The amount of the new security deposit is negotiated between the parties, but can be decided by the bankruptcy court if no agreement is reached. If the debtor does not provide "adequate assurance of future payment" within the 20 day time period, the utility provider may discontinue services.

A few years ago the Fifth Circuit Court of Appeals decided that a cable television provider is not a utility service for purposes of the bankruptcy code. In issuing its decision, the Court said:

“This section is intended to cover utilities that have some special position with respect to the debtor, such as an electric company, gas supplier, or telephone company that is a monopoly in the area so that the debtor cannot easily obtain comparable service from another utility.”

By analogy internet and cell phone services would not be considered utilities by the bankruptcy courts.

If your family is overwhelmed by debt and facing a utility disconnection, consider bankruptcy as a way to "keep the lights on" and provide some relief. An experienced bankruptcy attorney can explain how the bankruptcy code can prevent a utility disconnection and stop all creditor collection action.  Call Fears | Nachawati today for a free consultation by dialing toll free 1-866-705-7584 or e-mail us at info@fnlawfirm.com. 

One of the most embarrassing and inconvenient things that can happen in a household is to have the utility power suddenly turned off. Unfortunately, it can and does happen when someone gets behind in their utility bill and fails to make payment arrangements with the utility company. It can also happen when you are too far behind and cannot catch up. At that point the utility company can only extend past due payments for so long and at an amount that you will not be able to realistically afford.

If you are in this scenario, chances are that you are also behind in other bills. A good option may be to file for bankruptcy. By filing for bankruptcy in Fort Worth the electric company cannot refuse or cut off service. But, the utility company can require a deposit for future service and you will also have to pay bills that arise after bankruptcy is filed.

A bankruptcy lawyer in Fort Worth can go over more specific details case by case, as everyone’s financial situation is unique.

If you are feeling the stress of past due utility bills and not enough money to pay them, then bankruptcy may be a good solution for you.  For a free bankruptcy consultation contact Tarrant County bankruptcy law firm, Fears | Nachawati Law Firm, toll free at (866) 705-7584 or via e-mail at info@fnlawfirm.com.