If you are filing for bankruptcy, you might be facing foreclosure, vehicle repossession and having your lights 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 schedule that is monitored by a court-appointed trustee. Upon the completion of this payment plan, all remaining debts are discharged and no longer owed. Under Chapter 7, any past due utility bills are discharged and you must continue to pay any new monthly bills.
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 from which you want protection. 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.
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 a utility account is not past due, or is nearly paid in full, you may be unable to list the 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.