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Utility Bills and Bankruptcy

Two Rules for Utilities and Bankruptcy

When people are current with their utility bills, utilities rarely become an issue in bankruptcy.  That is because Section 11 U.S.C. § 366(a), prohibits utility companies from discriminating against people based solely on bankruptcy filing. However, often being current is not the case and people seek to discharge their back utilities debts through bankruptcy. You can do that, but keep in mind there are two issues to consider.  First, pursuant to 11 U.S.C. § 366(c)(4), a utility company has a right of set-off against your deposit.  Meaning, the utility company can keep your deposit and apply it to your pre-petition debt. Second, pursuant to 11 U.S.C. § 366(b), the utility company may shut off your service on the 21st day following the filing of your bankruptcy petition if you are discharging a debt to the utility company and have not paid a post-petition deposit.  In other words, if you file a bankruptcy and plan on discharging a debt to a utility company, you will lose your deposit and have to pay a new deposit within 20 days of filing bankruptcy in order to keep your power from being shut off.  The amount of the deposit is another issue that will be discussed later. If you reside in Maryland and are looking for a bankruptcy lawyer in Maryland to assist you with filing a Chapter 7 or a Chapter 13, call us today for a free consultation.  A Chapter 7 bankruptcy in Maryland will eliminate credit card debt, medical bills, utility bills (BGE), judgments, garnishments and many other types of bills.  We have offices all around the Baltimore area, and an experienced staff of attorneys and paralegals who will assist you.  Call (410) 766-4044 today for and schedule an appointment. David L. Ruben, Esquire

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