Utilities and bankruptcy

by Rachel Lynn Foley, Esq.

February 3, 2007

People often seek to discharge their back utilities payments through bankruptcy. You can do that but keep in mind that the utility company can and often will charge a deposit for your service. The bankruptcy code allows the utility company to shut off your service on the 21st day following the filing of your bankruptcy petition if you are discharging a debt to the utility company and HAVE NOT paid a post-petition deposit. If you live in a cold weather region the “cold weather rule” may apply but when the temperature climbs the utility company will be allowed to shut off your service if you have not made a deposit.Generally, if you are filing a bankruptcy and getting rid of back utilities, the utility company will issue a new post-petition account number. With this new account number you will pay your ongoing utility service that have accrued post-petition plus a portion of the deposit. If you pay on time for six months to a year your deposit will be refunded to you. This policy is different for every company so call your utility company before you file bankruptcy. This step will make you aware of what the policy is and help you plan for the deposit you will need to make if you discharge your utilities in bankruptcy.

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Former Bankruptcy Attorney to the Kansas City UAW: Ford and GM workers, now assisting the general public in Missouri and Kansas with regaining financial control using the Bankruptcy Code. 816-472-HELP (4357).

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Last modified: December 13, 2007