The answer is no. Declaring bankruptcy does not necessarily result in the disconnection of your utility services. Utilities like water, electricity, and gas are essential for everyday living. The law recognizes this and provides protections for those who file for bankruptcy.
You can put your fears of losing utilities to rest
In most states, including Indiana, an automatic stay immediately takes effect when you file for bankruptcy. This stay prevents creditors, including utility companies, from taking collection actions against you. The automatic stay offers several protections:
- It stops utility companies from disconnecting your services
- It prevents them from demanding large security deposits
- It gives you time to catch up on overdue payments
Utility companies must continue providing services to customers who have filed for bankruptcy. They cannot discriminate against you or treat you differently because of your bankruptcy filing.
They may, however, require you to take certain steps to maintain your services. For instance, they may ask you to provide a security deposit within 20 days of filing, stay current on new bills that come due after filing or set up a payment plan for any past-due amounts.
Ensuring a smooth transition
It is important to note that while bankruptcy can help you manage utility debts, it does not erase them completely. You will still be responsible for paying for services you use after filing. Staying on top of new charges is crucial to avoid future issues.
If you are facing utility disconnection before filing for bankruptcy, you should act quickly. Filing can stop an impending shutoff and give you time to arrange for continued service.