Bankruptcy: What If I’m Behind On Utility Payments?

When it comes to determining if
you are going to file a bankruptcy a number of questions begin popping
up. People ask about student loans, homes, cars, etc. It is often not until
they are just about to file that some of the more subtle questions
are asked. One of those questions is:

What Happens If I’m Behind On My Utility Bills?

If you are in this situation, please

understand that this happens quite frequently.

When creditors are calling and driving you up a wall, sometimes

a utility payment gets paid to another company instead, just to shut them up. After all, the utility companies don’t make

quite as much noise when you miss a payment. The downside is

that before you know it, you are a couple months behind and making partial


The good news is that you can

include those back payments in your bankruptcy.

When you do this, the utility company cannot shut off your utilities for

20 days after the time you file. After

you file they cannot shut off your service for non-payment of the bill you owed

before you filed, but they could then stop service for non-payment of any service used after the filing. For service going

forward the utility companies are entitled to what’s called, Adequate assurance

of payment for future services. Most of

the time this is a deposit of some sort.

If the deposit amount is astronomical, the bankruptcy court has the

power to reduce the amount if it agrees that it is too high. You will have to request a hearing from the court to see if the amount can be adjusted.

What Happens If The Utility Company Has Already Cut Off
Services Before Filing?

If your service has been cut off

prior to filing the service can be restored after you file. You will likely need to follow the new

customer protocol of the utility company and pay a deposit if necessary, but

the service can be restored.

What Happens If The Utility Company Cuts Off Service Anyway?

If the utility company violates the Federal Code

and cuts off service in the 20-day window, then you have several remedies. Primarily you will be able to have the Court

order them to restore service. If they

willfully and knowingly violate the rule, then you may be able to try for a

contempt citation. Lastly, if the utilities being shut off causes you harm or

you are damaged in some way by this, then you may be able to see an award of

damages against the utility company.

If you are considering bankruptcy and have questions please contact our bankruptcy attorney Kurt Kazmierczak at 219-615-0064 or send him an email: [email protected]

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