If you are filing for bankruptcy, you might be facing foreclosure, vehicle repossession or utility shut off. Bankruptcy can protect you from harassing creditors and prevent utility companies from turning off your water, power, gas and other services. However, to engage these protections, you must list unpaid utility bills in your bankruptcy petition and you might be required to pay a deposit for future utility service.
Chapters 13 and 7
Under Chapter 13 of the Bankruptcy Code, you must pay any outstanding utility bills according to a repayment schedule that is monitored by a court-appointed trustee. Upon the completion of this payment plan, all remaining pre-bankruptcy debts are discharged and no longer owed. You'll continue to pay your ongoing utility bills during that time as well.
Under Chapter 7, any past due utility bills are discharged and you must continue to pay any new monthly bills.
Delinquent Utility Accounts
Although you won't "file" a utility bill in bankruptcy, when submitting a bankruptcy petition under Chapter 7 or Chapter 13, you must list all past due utility accounts as creditors. These accounts can include electric, water, sanitation, natural gas, cable television, telephone and cellular telephone service. Failure to list the past due account may allow the creditor to turn off service and collect on the prior debt despite the bankruptcy petition, and you'll have to take extra steps to notify them of the bankruptcy and stop the shutoff.
The Automatic Stay in Bankruptcy
Under bankruptcy law, once you file a petition for bankruptcy protection, an automatic stay goes into effect preventing creditors, including utility companies, from making efforts to collect on past debts. The automatic stay prohibits utility companies from turning off service, calling you, sending collection notices, or engaging in other communications with you about the debts owed. In some circumstances, you may be eligible to have previously disconnected utility services restored after filing for bankruptcy. However, in order to receive services, you may be required to pay a deposit to the utility company. If the utility already has a security deposit from you, they are not required to return it.
Future Utility Costs
If a utility account is not past due, you cannot list utility company in your bankruptcy petition since there is no outstanding debt to have discharged by the court. Additionally, the utility companies are permitted to bill you for any services provided after the petition for bankruptcy is filed. Therefore, if you fail to pay a deposit or make timely payments on new services, the utility company may resume collection calls and disconnect service even though you are under bankruptcy protection.
Read More: How to Separate the Utility Bills in a Divorce
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