Utilities and Chapter 7 Bankruptcy

Some debts are treated differently than all others. Utility bills and services are one of those treated differently. Utilities are Electricity, Gas, Water and Telephone services. It is true that filing for bankruptcy will prevent utilities from being cut off. The questions are: 1. Whether past due utility bills are dischargeable; 2. Do I still have to pay my utility bills; and 3. Will my utilities be cut off?

        1. Whether past due utility bills are dischargeable

The short answer is yes but only amounts due prior to filing bankruptcy. They are considered unsecured debts and are dischargeable. Amounts owed after filing for services provided will be due and if not paid along with adequate assurances provided utility services can be cut off.

        2. Do I still have to pay my utility bills?

If you want to keep your utility services, you do. But, you will only have to pay amounts due for services provided after filing.

        3. Will my utilities be cut off

The short answer is no. But they could be after filing. A debtor in bankruptcy is protected from utility cut-off or alteration for a twenty (20) day period after the petition is filed. However, the debtor must provide “adequate assurances of payment” to retain post-petition service. This will be cash deposits or some other security. To ensure uninterrupted service, the debtor should attempt to reach an agreement with the utility providers as soon as possible after filing. It is unclear what will happen if the utility company does not respond to attempts to provide adequate assurances. The Court has no authority to extend the injunction past twenty (20) days.