Can Utility Bills Be Included In Chapter 7 Bankruptcy?

Even if you have fallen behind on your utility bills, filing for Chapter 7 bankruptcy might be able to keep your utility services connected, including electricity, gas, water, or phone.

Utility debts are typically discharged or wiped out in bankruptcy. If you owe back payments on utilities and file for bankruptcy, the utility provider is not permitted to alter, refuse, or terminate your service.

Utility services cannot be denied in a bankruptcy

Because it is not covered by the automatic stay in bankruptcy, this restriction is located in a different part of the bankruptcy code. It also bans utility companies from shutting off or denying service to you just because you filed for bankruptcy.

Unsecured debts, such as overdue utility bills, are wiped out in Chapter 7 and in Chapter 13. Babi Legal Group can help you while filing bankruptcy to fully understand what happens to delinquent utility bills.

What happens to past-due utility bills after bankruptcy?

You will need to convince the utility company that your payment assurance is good enough so they will not turn off your power or you will need to get the court to order the utility to accept your payment assurance.

The bankruptcy law is unclear about whether the utility can cut off your service after 20 days unless it asks for court permission first. A bankruptcy attorney can guide you through the steps that provide adequate assurance for you in the bankruptcy court.

Most utility companies will simply just refuse to service you, but in most cases, if you file bankruptcy on outstanding utility debts, then the utility company upon filing a bankruptcy case, will establish a new account for your service and include the old account in the bankruptcy.  The catch is that the utility company can now require you to pay a security deposit towards the new account and service before they continue to serve you.

Act soon

Do not wait until the last minute to take care of the issue of whether you have enough money to keep your home. If you hire a bankruptcy lawyer, work with them so that you do not lose your services.

Will my utility company shut my service off after bankruptcy?

No, they cannot do that. Chapter 7 bankruptcy may provide immediate relief if you are facing a utility shut-off, such as your gas or electricity.

If the utility bill is overdue and they have already disconnected your service, they will be required to reconnect it. Utility providers also cannot harass you for payments.

How to keep the utility company providing the utility service?

However, to keep the service running, you must provide acceptable assurance that you will be able to pay future utility expenses within 20 days of filing.

Cash deposits, letters of credit, certificates of deposit, surety bonds, and prepayment of utility expenses are examples of adequate assurance.

Under the Bankruptcy Code, consumers are protected from post-petition service disconnection by ensuring that utility providers have adequate assurance of payment.

How many days do I have until a utility shut off after bankruptcy?

According to bankruptcy schedules, you must show the utility company that you will be able to pay future utility bills within 20 days of filing bankruptcy.

This is referred to as giving “sufficient assurance,” and if you don’t follow this procedure, the utility provider can cut your service – even if your debts are ultimately settled through bankruptcy.

How can I provide adequate assurance in my bankruptcy case?

A letter of credit may suffice. A cash deposit, a surety bond, or even a certificate of deposit might also be provided as assurance.

What if my utility company asks for the adequate assurance I cannot give?

If you and your utility company can’t agree on whether or not your payment assurance is sufficient, you may seek the assistance of the bankruptcy court through a lawyer. The deposit amount may be modified after negotiating with the lawyer that represents you as once the issue is brought to the Court’s attention a Bankruptcy Judge can order the utility company service the account on different terms.

What happens to the future utility bills I owe to utility companies if I am filing for bankruptcy?

To begin, verify that your outstanding utility expenses are listed on your bankruptcy plans.

Your attorney will send a letter to the utility company, which will notify them that you’ve filed for bankruptcy. This will ensure there is no utility shut-off because of your pre-bankruptcy utility bills.

The utility company cannot try to collect past-due utility bills after you file bankruptcy protection. Then the law prohibits utility companies from making phone calls or contacting you for assurance of payment as this violates the bankruptcy automatic stay provision that protects the person filing for bankruptcy.

Don’t forget you still have to pay future utility bills

Even if you filed for bankruptcy, any services you receive after the filing will still be subject to new utility costs.

If you don’t pay, the energy provider may attempt to collect your new liabilities or turn off your service.

Why file for bankruptcy within an attorney-client confidential relationship?


If you want to request adequate assurance that you are filing bankruptcy correctly within the federal law, we recommend you do not go to a debt relief agency. Unlike a serious attorney-client relationship, these agencies cannot guarantee to keep your sensitive or confidential information safe.

Benefits of filing bankruptcy with a bankruptcy lawyer

On the other hand, bankruptcy attorneys evaluate every aspect of the bankruptcy process with you. They will go with you in your bankruptcy case to understand how to handle your past-due utility bills and prevent the companies from shutting off their services.

How to find the best bankruptcy lawyer?

We recommend you do not do a zip code search for a top-rated bankruptcy attorney and conduct a few consultations to determine who you feel most comfortable with assisting you in your case. The best way to find a serious law firm is by recommendation or by getting a free evaluation where the attorney explains everything she or he has to offer you in respect to their future service towards bankruptcy protection and in front of the bankruptcy court.