Bankruptcy Questions Answered: Can Bankruptcy Keep My Utilities On?

There’s never a good time to have financial woes, but it’s especially troubling if you’re staring down debt in the hottest or coldest seasons, and the utility company threatens to shut off service. Financial struggles that prevent you from paying bills in full and on time can quickly lead to threats and notices from your local gas, water, telephone or electricity provider. 

State and federal programs exist to help homeowners who are having a hard time keeping up with utility bills. But sometimes, that isn’t enough, and filing for a chapter 7 or chapter 13 bankruptcy is the best way out from under substantial debt. At Hausen Law, we understand what you’re up against. Here’s our best advice for how to deal with threats of utility shutoff when you’re already struggling.

When a Utility Company Threatens Shutoff

In a cold Ohio winter or a sweltering summer, it can feel harsh for a utility company to shut off services–it’s well known that extreme temperatures can quickly become life threatening. Knowing this, governments have put in place guidelines to ensure that utility customers who have fallen behind on their bills are given ample opportunity to square up before the company takes a serious action, like shutting off utilities during winter months. 

A 14-day notice of utility shutoff is the norm In Ohio. However, between November 1 and April 15, utility companies must give customers an extra 10 day shut-off notice. This extra notice may allow a customer enough time to get current on a past due utility bill and prevent losing heat and power during the coldest time of year. The state also offers Winter Crisis and Summer Crisis financial assistance programs for eligible residents, along with a potential medical exception. All of these options require individuals to apply for the program and supply necessary documentation. Another program–Percentage of Income Payment Plan Plus (PIPP)–may offer some help for utility customers who qualify.

All that said, if bills aren't paid, it is perfectly legal for a utility provider to carry out their threats of service shutoff, so long as they follow all proper disconnection notification procedures. Once warnings are sent and the bill is still unpaid, the outstanding balance will be sent to a collection agency and the utility provider will discontinue service. Other than paying your bill, is there any other way to stop a utility disconnection?

Utility Debts and Bankruptcy

If you’re having a hard time keeping up with utility bills, it’s likely that you are dealing with larger financial problems too. Bankruptcy can help you to get your finances back on track. One of the many bankruptcy questions you may ask yourself if you’ve received a utility shutoff notice is, “Can I include utility debts in a bankruptcy filing?” The simple answer is, yes, you can. Utility debt is just another form of unsecured debt, which means that there is no physical property that serves as collateral–the debt is instead payment for services.

Once you file for a chapter 7 or chapter 13 bankruptcy, the automatic stay that goes into effect will prevent collectors from harassing you. It will also prevent utility companies from shutting off your service. Working with an Ohio bankruptcy lawyer and a court-appointed trustee, you may even be able to have some or all of your past due utility bills discharged or wrapped into a consolidated repayment plan. If service has already been shut off, a bankruptcy attorney can advocate for you in an effort to restore service to your home.

As part of the utility company restoring or continuing to provide service, they will typically ask for a “reasonable deposit” or “adequate assurance.” This is a set sum that can act as a security to ensure that future bills are paid. It is generally due within 20 days of filing for bankruptcy. 

The sum of the assurance you provide to the utility company is often around three times the amount of a typical monthly bill, though it could vary. This adequate assurance payment is vital to ensure that your service remains constant, and as long as it is provided within the 20 day window, a utility company is required to continue service, regardless of whether past due bills are discharged in bankruptcy. Working with an experienced Ohio bankruptcy lawyer is the best way to be sure that all necessary steps are taken to keep your utilities on.

Bankruptcy In Ohio? Our Bankruptcy Attorneys Can Help

Dealing with financial troubles is stressful enough. Add threats of utility shutoff into the mix and you could feel completely overwhelmed, with no way out. If you’re at this point, bankruptcy is a provision to help you sort things out and start over. 

Working with an experienced chapter 7 bankruptcy lawyer–like James Hausen and his team–is a great first step. Our Ohio bankruptcy lawyers are ready to help. We can quickly work to restore utility service or prevent shut offs while also helping to eradicate past due bills. 

Give us a call or fill out our online contact form and we will be in touch. Hausen Law is happy to serve all of Northeast Ohio, including the Akron, Canton, Cleveland, Wooster, Dover/New Philadelphia, and Youngstown communities. Contact us today to set up a free consultation.