In the weeks and months before filing for bankruptcy, you may have fallen behind on your bills. You may have even fallen behind on your utility payments, like sewer, electricity, gas, and water. When it comes time to file bankruptcy, how are utility bills handled?
Firstly, make sure you include past due utility bills as “debts” with your attorney. Your attorney will include any unpaid balances with different utility services and companies on your bankruptcy schedules. When filing bankruptcy, you are required to list all your debts and delinquent accounts. Some “delinquent accounts” may not seem like debts because you don’t consider the accounts as credit. They are often bills that you intend to keep paying, like your utility bill. Make sure to provide your attorney with all this information to include on your bankruptcy schedules.
Since they are included in the bankruptcy schedule, the utility company will receive an official notice of your filing and will be subject to the automatic stay of bankruptcy. This ensures they cannot terminate your utility service for non-payment.
Once you’ve filed bankruptcy, the automatic stay prohibits all collections efforts with very few exceptions. So the utility company can no longer collect on your past-due account’s bill. You will be responsible for paying new charges promptly, and the utility company will not be prohibited from terminating utility services if non-payment continues on original charges incurred after filing bankruptcy. During the bankruptcy, your old utility account is either paid by the bankruptcy trustee or discharged.
If you provided your utility company with a security deposit, they might use that security deposit and apply it towards your past due balance. They may also require that you submit a deposit after filing bankruptcy to continue receiving utility services. While utility companies are prohibited explicitly from refusing service to someone because they filed for bankruptcy, they can refuse to offer service if you refuse to provide them with a reasonable deposit after filing. If the amount of the deposit is too much, contact your attorney. They may be able to file a motion with the court to have the amount reduced.
If you have questions about how your utility bills are handled during bankruptcy or if you are considering filing bankruptcy and need to discuss the pros and cons, please get in touch. Most bankruptcy offices in the Chattanooga area don’t have a single Consumer Bankruptcy Specialist on staff. Our office is the only office in the Chattanooga area with two. You are in good hands with Kenneth C. Rannick P.C.