Past Due Utility Bills and Bankruptcy
If you’re facing financial difficulties, you may also be behind on your utility bills. You’re likely wondering what happens to your unpaid utility bills and if your services will get shut off if you file for bankruptcy. The bankruptcy attorneys at Sasser Law Firm are here to help.
Do I Have to Include Utility Bills When Filing for Bankruptcy?
When you file bankruptcy, you have to report all delinquent utility bill accounts. Unpaid utility bills are considered a debt that must be included when filing bankruptcy. The utility provider will receive official notice that you filed, and they cannot turn off your services because of the pre-bankruptcy bill. But there are a couple of exceptions.
Section 366 of the Bankruptcy Code prohibits a utility provider from altering, refusing, or discontinuing service because a customer files bankruptcy, even if they have an unpaid bill. However, the provider can discontinue service if the debtor doesn’t pay a deposit or other security within 20 days of filing the case. Of the utility companies in the Raleigh area, Duke Energy generally requires a deposit for the amount of about two months’ worth of service. The utility provider may also use a security deposit that the debtor paid before filing bankruptcy to pay the past due bill.
Because the utility company may require a deposit, it usually isn’t helpful to owe a past due utility bill if you need future service. There is some protection afforded in bankruptcy, though.
Does Filing for Bankruptcy Clear Utility Bills?
Whether filing for bankruptcy will completely clear your utility bills depends on which chapter of bankruptcy you file. Chapter 7 bankruptcy will typically wipe out unsecured debt such as utility bills.
Chapter 13 bankruptcy usually requires you to repay a portion of your debts on a payment plan. Your utility bills will likely get added to your other unsecured debts you’ll have to pay back during this process. You will also have to keep up with your current utility bills if you wish to continue service.
Contact an Experienced Bankruptcy Attorney in North Carolina Today
If you have any questions about whether filing for bankruptcy includes your utility bills, Sasser Law Firm can give you honest and compassionate guidance. With 20 years of experience practicing entirely in bankruptcy, we’re ready to assist you. Give us a call or contact us online today to talk to one of our understanding bankruptcy lawyers.
This post was originally published in February 2014 and has been updated for accuracy and comprehensiveness in March 2022.
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For more than 20 years, the Sasser Law Firm has been helping individuals and business owners sort through financial hardships to see the light at the end of the tunnel. Our North Carolina bankruptcy attorneys are all board-certified specialists, which means we have passed a complex exam, undergone a thorough peer review, and continue to earn legal education credits in this ever-evolving area of law.