The filing of a bankruptcy can help you to prevent your utility company from disconnecting your service, as well as to discharge any past due amounts. If you are behind on payments to your gas or electric provider, bankruptcy may provide a very useful remedy to you.
Wisconsin law states that if the utility service directly or indirectly affects the primary heat source of the home, consumers cannot be disconnected during the heating moratorium period from November 1 to April 15. But once April 15th comes around, if you are behind on utility payments, you are subject to disconnection.
The Bankruptcy Code specifically addresses utilities, and provides that a “utility may not alter, refuse or discontinue service” to a debtor who files for bankruptcy. In addition, the Bankruptcy Code allows you to discharge any amounts owed to the utility provider, and prevents that utility provider from disconnecting service as a result of those past due amounts.
However, it is important to be aware that the prohibition against discontinuing service doesn’t last forever. If you are discharging utility company bills in your bankruptcy, the Bankruptcy Code gives the utility provider the right to charge you a deposit shortly after your case is filed. If you are unable to pay the deposit the utility company can discontinue service.
The amount of the deposit must be sufficient to give “adequate assurance of payment.” What does this mean? In most cases, it will be approximately equal to two months’ worth of service, which in most cases is significantly less than the past due amounts owed. Provided you are able to come up with the deposit and maintain payments thereafter, your service will continue as usual. In addition, if you make your next twelve payments in full and on time, the utility provider is required to return this deposit to you.
If you are concerned about having your power shut off due to past due utility bills or other utility disconnection, it is important to be aware of your rights in bankruptcy. While past due utility bills alone may not warrant the filing of a bankruptcy, having past due utility bills is often symptomatic of larger financial troubles and bankruptcy can provide relief as well as some breathing room. If you are facing a possible utility shutoff, consult an experienced lawyer, such as attorney Kristie Radloff or attorney James Stanek of Bankruptcy Law Center, LLP for a free consultation to explore any options that may be available to you.