Bankruptcy and Utility Bills in Texas: Can You Keep Your Services
Struggling with unpaid utility bills and worried about service disconnection? Many Texans face financial hardships that make it difficult to keep up with electricity, water, and gas payments.
One common question is whether filing for bankruptcy can stop utility shut-offs. The answer is yes, but there are important steps to take.
Does Filing for Bankruptcy Stop Utility Disconnection in Texas?
Filing for bankruptcy places an automatic stay on most collection actions, including utility disconnections. This means:
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Your electricity, water, and gas cannot be shut off immediately
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Utility companies must continue providing service
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You get time to resolve past-due bills
However, this protection only lasts for 20 days unless further action is taken.
What Happens to Utility Bills When You File for Bankruptcy?
Filing for Chapter 7 or Chapter 13 bankruptcy can help with past-due utility bills, but each type of bankruptcy affects your debt differently.
| Bankruptcy Type | Impact on Utility Bills | Best for |
|---|---|---|
| Chapter 7 | Discharges past-due utility bills, but you must provide a deposit to keep services active | Texans looking to wipe out unsecured debts quickly |
| Chapter 13 | Allows you to pay off utility bills in a structured repayment plan | Those with a steady income who need long-term debt relief |
In both cases, future utility bills must still be paid on time to keep services running.
How to Stop Service Disconnection in Texas
Even if you have not filed for bankruptcy yet, there are ways to prevent utility shut-offs.
Negotiate a Payment Plan
Most Texas utility companies offer flexible payment arrangements. Call your provider and ask about:
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Deferred payment plans
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Low-income assistance programs
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Bill extensions
Apply for Utility Assistance Programs
Texas offers several financial assistance options, including:
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Comprehensive Energy Assistance Program (CEAP) – Helps low-income households with electric and gas bills. More details are available on the Texas Department of Housing and Community Affairs website.
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LITE-UP Texas – Provides discounts for eligible electricity customers.
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Salvation Army Utility Assistance – Emergency funds for past-due utility bills.
File for Bankruptcy to Trigger the Automatic Stay
If you are severely behind on payments, bankruptcy stops service disconnections while you get back on track.
If you file for bankruptcy, you must provide a deposit within 20 days to keep your utilities connected.
What If My Utility Company Still Threatens to Cut My Service?
Under U.S. Bankruptcy Code (Section 366), utility companies cannot disconnect service solely because a customer filed for bankruptcy.
However, if a required deposit is not paid or future bills are not kept current, service can be legally disconnected.
If a provider still tries to shut off service despite bankruptcy protection, contact a bankruptcy attorney immediately.
FAQs About Bankruptcy and Utility Bills in Texas
Can I Discharge Utility Bills in Bankruptcy?
Yes. Past-due electric, gas, water, and sewer bills can be wiped out in bankruptcy.
Will Bankruptcy Affect My Credit When Applying for Utility Service?
Utility companies may check credit history when setting up new service. A bankruptcy filing can appear on record, but it does not automatically disqualify someone from getting utilities.
Can I Get Utility Service Without a Deposit After Bankruptcy?
Most utility companies require a deposit, but waivers may be available for customers who:
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Enroll in automatic payments
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Provide proof of low-income status
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Have a history of on-time payments
What Happens If I Do Not Pay Future Bills After Bankruptcy?
Bankruptcy only clears past-due balances. If future bills are not paid on time, the provider can legally disconnect services.
Why Choose Kisch Consumer Law for Debt Relief in Texas?
At Kisch Consumer Law, experienced professionals assist Texans in:
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Stopping service disconnections
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Eliminating past-due utility bills
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Finding the best bankruptcy option for long-term relief
For those facing utility shut-offs, Kisch Consumer Law can provide legal guidance and solutions.
Final Thoughts: Can Bankruptcy Keep Your Lights On?
Bankruptcy prevents utility shut-offs, clears past-due bills, and offers financial relief.
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The automatic stay stops disconnections for 20 days
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A deposit is usually required to maintain service
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Future bills must still be paid on time
For those needing help stopping service disconnection, Kisch Consumer Law provides expert guidance.