When you are filing for bankruptcy you are normally required to list all of your outstanding bills and debts. There are many debts that can be wiped out in bankruptcy, including utilities such as gas, electric, and telephone. Many people are concerned that if they put their utility bills in bankruptcy the utility will shut off service. Do not worry about that because it is totally illegal for a utility to shut off service when a person files for bankruptcy.
In fact, the opposite is true. If you have had your service shut off because you have been unable to pay your bill, once you file for bankruptcy the utility is required to turn your service back on. The utility is not allowed to turn off service for someone who is in bankruptcy, as long as that person is making payment on his/her utility bill for service and usage that has taken place after the bankruptcy filing. In addition, the utility can require a security deposit to be made.
Here is a simple example of how the procedure works. Assume you have a $350 electric bill and a $500 phone bill. With a bill that large, your service is in jeopardy of being turned off. Let’s assume that you owe this money as of June 1. If you file for bankruptcy on June 1, the electric company and phone company are not allowed to turn off service to your home. Furthermore, they are required to zero out your bill as of June 1.
This means that you do not have to pay your old utility bill that was incurred before you filed for bankruptcy. When you continue to use your telephone after the June 1bankruptcy filing date, you are responsible for billing after that date.
Realistically, sometimes it takes the utility company a while to reset their computers and bill you correctly. In the above example you might use $200 worth of electric and $200 worth of phone service during the month of June, and on July 1 you might get a bill for $550.00 for the electric and $700.00 for the phone bill. If you get a bill like this, it is a mistake. It simply means that the utilities have not yet updated their computers to reflect your bankruptcy filing. In this example you are only responsible for a $200 phone bill and a $200 electric bill because that was the cost of your utility usage after June 1. You are only responsible for usage after the bankruptcy was filed.
It is also important that you know that the utility company can require a security deposit for future usage. For example, if your phone bill is usually $100 a month, the phone company might ask for a deposit of $100 within 20 days after your bankruptcy is filed. This is not a bad thing, because it is really like putting money in the bank. When you make a deposit to the utility, they have to keep your money in a special account and it normally earns interest at the rate of 6% per year. If you keep paying your utility bills after the bankruptcy has been filed, the utility will normally return your deposit within 12 months after your bankruptcy has been filed, with interest. Its like putting money in the bank.
If for some reason the utility requires a deposit which is beyond your financial ability to pay, please let us know because we have the right to negotiate with the utility service to lower the deposit. Furthermore, if for some reason we cannot reach an agreement with the utility company as to what would be a fair deposit, we have the right to ask the bankruptcy judge to reduce your deposit to something reasonable that you can easily afford.
We therefore recommend in most cases that our clients normally include their utility bills as part of their bankruptcy. The bankruptcy law has given you this right to wipe out your pre bankruptcy utility bills, so you might as well exercise your rights and use the law in a favorable manner as you are permitted to do. If for some reason your utility bill is up to date and rather small you might just want to pay it off and not put it in your bankruptcy.
If you have any questions concerning your rights and responsibilities, and the responsibilities of the utility company with respect to outstanding bills owing to your phone company, gas company, and electric company, feel free to ask us.
We would also like you to know that you can wipe out a pre-bankruptcy bill for cable TV by filing for bankruptcy. The cable TV company is not a utility, however, and they normally will charge you a fee to turn on your cable service if it has been turned off before bankruptcy. From our experience in dealing with the cable TV companies, it is usually not a problem when you list any pre bankruptcy bills to be wiped out in your bankruptcy. The cable TV company is normally happy to retain you as a customer and continue to give you service in the future.
Keep in mind that the purpose of the bankruptcy law is to give you a fresh start, to wipe the slate clean, and to give you the opportunity for a brighter financial future. If you use the law to obtain favorable results as you are permitted to do, you can legally save a lot of money and be on your way towards the fresh start that the government wants you to have and that you deserve to have.
See the next page for phone numbers to contact any utilities with respect to your bill.
Approximately 1.5 million people filed for bankruptcy in the last year. You should not feel guilty or ashamed that you are filing for bankruptcy protection. You should be happy that Congress has passed laws to help people in your position so that you can hopefully have a much better financial future and be relieved from much of the financial pressure and stress which you may presently be under.
We wish you the best for the successful completion of your bankruptcy. Please also keep in mind that we perform legal services in other areas besides bankruptcy. We also assist people with cases such as personal injury cases, traffic court, matrimonial proceedings, real estate, worker’s compensation, social security disability, drunk driving, driving while revoked, criminal cases, and many other matters. If we can ever assist you or your family or friends in the future with other matters we would certainly be happy to help.
PHONE NUMBERS TO CONTACT LOCAL UTILITIES
In the event you need to contact any of the local utility companies concerning your billing or questions about your service you can use the following telephone numbers or fax numbers. When calling you should ask to speak with someone in the bankruptcy department since they would have the most knowledge concerning your situation.
|Company||Phone #||Fax #|
|South Jersey Gas||1-609-561-9000
|Comcast Cable||692-2100||856-427-4601 Bankruptcy — Attn: Kahlia|