Let’s Ask ESSER: My utilities have been shut off. If I file a bankruptcy, will they turn my utilities back on?

Q:

My utilities have been shut off. If I file a bankruptcy, will they turn my utilities back on?
Hopeful in Waukesha

A:

Since 1982, multi award winning attorney Todd C. Esser has been leading the field, serving the community, and helping consumers just like you achieve success through trying financial times.Proceeding under the bankruptcy code to discharge debts while keeping homes and cars and providing a fresh start. Constitutionally protected bankruptcy laws were created to safeguard consumers.

Dear Hopeful:

The filing of a petition for relief under the United States Bankruptcy Code initiates a “stay” of any action or proceeding against the debtor or the debtor’s property under section 362 of the Code. Shutting off public utilities and/or refusal to re-connect service is an “action to collect a
debt” within the meaning of the Code and would be a violation of the stay if the utility company failed to re-connect after notice which included sufficient case information to verify that a stay is in effect.

Utility companies are aware of this rule and are fairly cooperative in taking timely action to re-connect service. Be aware however, that public utility companies are given some protections under section 366 of the Bankruptcy Code and have the right to request the posting of a security deposit as adequate assurance of future payments on the account. The amount of the deposit is governed by state tariff laws but is generally the sum total of the two highest monthly billings for the account in the last 12 months.

Failure to post the deposit is grounds for disconnection of service notwithstanding the stay. Utility companies are often willing to structure payment of the deposit over time if requested. The deposit plus interest is returned after 12 months assuming timely payments for future services are made.

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