Does Bankruptcy Affect My Utilities?

Debts owed to utilities are dischargeable through bankruptcy. This is good news for anyone facing large, past-due bills for gas, electric, cable, or cell phones. However, many of my clients considering bankruptcy are concerned that including a utility in the bankruptcy will result in the service being denied in the future.

Fortunately, the bankruptcy code prohibits a utility from denying service to bankruptcy filers. Not that they would probably even want to... most bankruptcy filers get current and stay current after filing. The utilities would be denying good customers.

However, the bankruptcy code does allow utilities to require a security deposit after filing. Most utilities in western Pennsylvania do not bother with this requirement. The lone exception is Duquesne Light. Duquesne Light will normally close out your account when a bankruptcy is filed, whether or not you have a past-due account. They will require a security deposit (sometimes rather large) for service to continue. I let my clients know beforehand so they can plan accordingly. Once again, no other utilities in western Pennsylvania require this at this time.

If you are current with your cable, cell phone, gas, or water, you can continue making payments as normal, and your service will not be affected. If you are facing a shutoff, the bankruptcy automatic stay will stop the shutoff, so sometimes it is important to act quickly.

It is always worth checking before filing a bankruptcy to see if you have older bills, especially with cell phone or cable companies. Old cell phones bills from college or earlier sometimes linger. Cable bills and expenses are sometimes forgotten after several moves, as it is easy to forget to end the service or return equipment.

Contact us to discuss your options if you have issues with old utility bills or you are facing a shutoff.