Bankruptcy And Your Utilities
It is important to understand the different consequences of filing for bankruptcy on your utility service.; Section 366 of the US Bankruptcy Code says that no utility company may alter, refuse, or discontinue service or discriminate against someone who has filed for bankruptcy for 20 days after the bankruptcy filing.; Essentially, Con Edison is not allowed to terminate electric service for at least 20 days after a bankruptcy petition has been filed.; After the 20 days is up the utility company may request adequate assurances from the debtor to continue service.; Adequate assurances are something protecting the utility company if the debtor does not pay future electric bills.; Sometimes an agreement that the debtor will make all future payments for service on time or the utility service can be terminated without normal procedures would be one example of adequate assurances. ;Similarly, a deposit for electrical service is often sufficient.
This is assuming that the debtor still has electric service when the petition is filed.; There are different scenarios that occur if the debtor does not have service when the petition is filed.
Chapter #24 Gas Cable Electric & Phone Bills
Gas, electric and telephone can be dealt with in a bankruptcy. If they are current, they should not be listed on a bankruptcy petition. If they are more than 3 months past due, they should be listed, because you can be protected from utility shutoffs, and continue getting utility service without paying the past due bills, in many cases. Most states have laws which say that public utilities cannot refuse to give you service after a bankruptcy, even if you had a bill with them that you are discharging.
For instance, if your electric bill is behind $600, and your regular monthly bill is $75.00, but your electric is shut off because you were so far behind, a bankruptcy will be of great help to you. I will list the electric company as a creditor, and provide you with documents that you must carry in person to the electric company. They will zero out your bill. You then can get service turned on, providing you make satisfactory deposit arrangements. Usually, the deposit would be 2 times an average bill, or 2 x $75.00. This may be payable in installments over several months.
So, you can see that, if you are severely behind in your utilities, and have enough other bills to warrant filing a bankruptcy, you can get your past due utility service up to date very quickly with very little money.
It may be better to file a Chapter 7 in such a case, and perhaps sell the house or live out the equity without making any more mortgage payments.
In Bankruptcy Utility Bills Are Non
Utility bills are usually dischargeable through bankruptcy. If you cannot pay your past-due utility bills, Chapter 7 bankruptcy may relieve you of the obligation to pay them. In a Chapter 13 bankruptcy, your debts are reorganized so that you can create a manageable payment plan. You will pay only as much as you can afford to of your past utility bills, and in many cases a portion of your past due bills will be forgiven at the end of the repayment plan.
Through either Chapter 7 or Chapter 13, you are able to get out from under overwhelming utility bills, along with other liabilities, and get back on track financially. The benefits of bankruptcy can improve your finances almost immediately.
Taking Action Before 20 Days Passes
To prevent a shut-off, you’ll either want to get the utility company to agree that your payment assurance is adequate, or get the court to order the utility to accept your form of payment assurance. The bankruptcy law isn’t clear about whether the utility can cut-off your service after 20 days without asking for court permission first, and your jurisdiction might operate under the assumption that utilities can do this. So don’t let the deadline pass without addressing the adequate assurance issue head-on.
How Utilities Deal With Debt
Utility companies occupy a unique monopoly position, so theyre carefully regulated by law. In Los Angeles, for example, the only providers of utilities are SoCalGas and the LA Department of Water and Power . Utilities also occupy a unique position in terms of the services they provide. Shutoff of utilities services may be life threatening. For that reason, utilities companies have very specific policies regarding late payments and non-payment of bills.
According to the LADWP rules, your water and electricity may be shut off if you fail to pay your bill within 19 days of the date it was mailed. SoCalGas has the same 19-day policy. So, what happens when you dont pay your bill?
If you dont pay your bill within 19 days after it was mailed, the utility company will send you a notice that your service will be terminated no less than 15 days after that notice was mailed. ;In other words, you have 19 days to pay and then about two weeks after that until the utility is shut off. If you want to reinstate service after the utility is shut off, youll have to work out a payment plan with the utility provider and pay a reinstatement fee. You may also have to pay a security deposit to get your services restored. Utility companies, including electrical, gas, heat and water, must legally provide this notice to you prior to termination of your services.
Also Check: What Are The Alternatives To Filing Bankruptcy
How Do I Make An Appointment For My Free Initial Consultation
Making an appointment is easy. You can call or today, fill out an online form to make arrangements for your free initial consultation. We offer evening and Saturday hours, hours by appointment, and conference call hours for out-state clients. We are generally able to see you within one or two days of your call. If your situation requires immediate attention, we will make every effort to see you the same day that you contact our office.
At Miller & Miller Law, LLC, in Milwaukee, Wisconsin, we are Chapter 7, Chapter 13 and Chapter 128 bankruptcy lawyers who represent and counsel clients throughout Wisconsin. We have offices in Milwaukee, Madison and Kenosha.
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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
Discharge Of Your Water And Sewer Bills
Every so often I receive a call from a former client that I represented in a Bankruptcy case complaining about a creditor attempting to collect a debt discharged in the clients case. I understand that mistakes happen. Information does not get to the proper party. Computers malfunction. However, it is frustrating when the actions of a creditor could be remedied by better training and/or instruction.
The facts for my most recent former client to contact me are familiar. The client files a Chapter 7 petition and receives his discharge. The debtor owned real property in the City of Toledo that he does not intend to retain. An outstanding water bill to the Department of Public Utilities is listed on the petition. A foreclosure complaint is filed and the real property sells at a foreclosure sale. There are insufficient proceeds to pay all of the liens against the property, so the bill to the City for water is unpaid.
Water and sewer bills are different from most creditors. The unpaid balance due to the Department of Public Utilities will become a lien against the real property and can be enforced against the real property. If a sale occurs, the unpaid balance may be paid from the sale proceeds.
Effect Of Bankruptcy On Utility Services
Alabama Attorneys Guiding Individuals through Financial Reorganization
If you are thinking about filing for bankruptcy, you may be concerned about the effect of bankruptcy on utility services, such as gas, sewer, water, electric, or telephone bills. Many debtors fall behind on their utility bills and have questions about whether they will lose service altogether by filing for bankruptcy. Or they may be worried about whether these debts are dischargeable. At Grainger Legal Services, our Alabama bankruptcy lawyers can advise individuals on these concerns.
The Effect of Bankruptcy on Utility Services
If you are in danger of a utility shut-off, you should be aware that Chapter 7 bankruptcy can potentially give you immediate relief. However, if you want to continue to receive utilities, you will need to provide adequate assurance or proof of being able to pay future utility bills within 20 days of filing for bankruptcy. Normally, this requires a deposit equal to the amount you are seeking forgiveness of so bankruptcy usually does not really help with utility debts.
The automatic stay will also stop the utility services from calling you about your debt or suing you for any overdue amounts. However, you will continue to be responsible for paying new debts for your utility services as they come due. If you do not pay them, the utility company can terminate your service for that reason.
Explore Your Bankruptcy Options with an Alabama Lawyer
Can I Include Utility Bills In Chapter 7 Bankruptcy
Utility bills are unsecured debts and treated like credit cards, medical bills, and personal loans in;Chapter 7 bankruptcy. They are discharged in bankruptcy. If you are able to file your Chapter 7 bankruptcy prior to the utility service being disconnected, the bankruptcy filing will prevent the disconnect.;
This is because the bankruptcy filing creates an immediate bar to any collection actions, including utility service disconnection.
When you file Chapter 7 and include your past-due utilities, all of the utility bills right up to the date of filing are included in Chapter 7 and discharged with no payment. As a bankruptcy attorney, I regularly see my debt relief clients surprised by the utility bills they get after filing bankruptcy. The utility company generally wipes out the bill up to the very day of filing.
In southern Ohio, we generally do not see utility companies ask consumers to provide adequate assurance of future payment. And, happily, utility companies tend to be very responsive to notice a bankruptcy case.;
In fact, we generally contact the utility company ahead of time if we know that we will be filing a bankruptcy very close to the shut-off date. Historically, the utility company has been very understanding and helpful in avoiding service disruption.
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Utility And Other Bills
Ongoing bill payments are a situation to be considered on a case-by-case basis. Technically utility arrears including hydro, gas, internet, cell phones and other recurring monthly payments are unsecured debt and, as such, can be wiped out when you file bankruptcy. However, some utilities will also shut off your services for arrears and may ask for a large deposit to reinstate your account.
If you need ongoing services, you will want to maintain monthly payments. When it comes to your cell phone or internet, talk with your trustee to determine the best course of action based on your situation. While Rogers or Bell will not generally cancel your service if you are up to date at the time you file, if you are significantly in arrears or want to choose a cheaper plan, it may make sense to stop paying and include those debts in your bankruptcy.
Will I Lose Everything If I File Bankruptcy
No. This is one of the biggest misconceptions. Bankruptcy laws were put into place to provide people who are suffering from financial hardship to get a fresh start. If everything was taken, it would not be much of a fresh start. So, the bankruptcy laws provide exemptions so you may not lose anything.
Also Check: What Do You Lose When You File For Bankruptcy
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What Types Of Debts Can I Discharge In A Bankruptcy Filing
There is a misconception that by filing for bankruptcy, all of your debts will go away. However, this is not true, both because there are multiple types of bankruptcy filingseach with different rules regarding the discharge of debtand because certain types of debts arent dischargeable.
For example, in a Chapter 7 bankruptcy, a debtors non-exempt assets will be liquidated and used to pay off a portion of debt; then, remaining eligible debts will be discharged. In a Chapter 13 bankruptcy filing, on the other hand, a debtor enters a plan to repay a portion of their debts over a three-to-five-year period, which means that these debts are not discharged until after the repayment plan has been completed.
- Certain taxes, such as trust fund debts;
- Student loans ;
- Debts incurred as a result of willful or malicious injury to another person or property.
Types of debts that are dischargeable in a bankruptcy filing include credit card bills, medical debt, personal loans, utility bills, business debts, collection agency accounts, and auto accident claim debt . If you have questions about whether or not a certain type of debt is dischargeable, consult with our bankruptcy attorney.
Read Also: What Are 4 Advantages Of Filing Bankruptcy
Will The Bill Collectors Quit Calling Me
Bill collectors should quit calling once you have retained an attorney. Our office can be retained for as little as $100.00. Once a case is filed, the automatic stay prevents creditors from continuing to try to collect on a debt owed. If they do continue to call you, legal sanctions may be imposed on the creditor.
Filing An Emergency Bankruptcy
If you decide that bankruptcy is your best option for preventing utility termination, you might have to file quickly. If you don’t have time to complete all of the required bankruptcy forms, you can file the petition and a few other items to start the process and stop the shut-off, and then file the remaining documents within 14 days. To learn more, see Emergency Bankruptcy Filing.
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How Much Does Bankruptcy Cost
Many factors play a role in the cost of filing bankruptcy. We are happy to give you an estimate of the fees and costs involved over the telephone. After we have an opportunity to meet with you, we will be able to evaluate your case completely and quote you an accurate fee.
Will bankruptcy stop a lawsuit against me?
A bankruptcy filing will stop a lawsuit and prevent your creditors from placing a lien against your house or garnishing your wages.
Can I file for bankruptcy every few years?
No. A debtor cannot obtain a discharge in a Chapter 7 case if the debtor obtained a discharge in a Chapter 7 case filed within the past eight years, or a Chapter 13 case filed within the past six years. The time periods in either case are measured from the commencement dates of the respective cases. The dates of discharge have no bearing on the disqualification. Please contact Miller & Miller Law, LLC, for other options.
What should I do if I cannot make my Chapter 13 payment?
Ive filed for bankruptcy. Now what?
Getting Utilities After Bankruptcy
When a person discharges past-due utility bills in bankruptcy and later seeks to establish utility service at a different location, it is possible that the utility company will require the security deposit payment. This right to require a security deposit is not always enforced. Ive seen numerous situations where my clients have been able to discharge past-due utility bills and establish new service at a different address after their bankruptcy without paying a security deposit.
Adequate Assurance of Utilities
Adequate Assurance of Utilities;under;the Bankruptcy;Code gives debtors protection against post-petition disconnection of services through providing;utility;providers with an adequate assurance of;payment. So, like the automatic stay prevents other creditors from collecting once a bankruptcy case is filed, the utility services cannot be shut off either for a consumer filing bankruptcy.
If you owe back payments on utility services and you file for bankruptcy, the utility company cannot refuse or cut off your service. This is prohibited in a different section of the bankruptcy code than the stay on repayment of debts . It also prohibits utility companies from refusing service just because they filed for bankruptcy.
Utility company can request adequate assurance of payment but often does not
The past due utility bills are unsecured debts, wiped out in Chapter 7 and paid as low priority debt in Chapter 13.
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