What about utility bills and bankruptcy?


What about utility bills and bankruptcy?

There are special rules regarding utility bills and bankruptcy. If you are not behind on your utility bills, we do not have to list them at all in your case. If you are behind on your utilities, especially if you are FAR behind, then including them in the bankruptcy will not only be necessary, but it will help you out a LOT.

Here's why. Let's say that on the day your case is filed, you are $600 behind on your electric bill. That entire $600 bill is going to be wiped away, or eliminated, along with your credit cards, medical bills, and other debts. The next monthly bill amount, of course, will not be wiped away. The electric company may ask that you put down a security deposit going forward. They do not do this simply because you file bankruptcy. They require this of anyone who falls far enough behind on their bill.

The good news is, with an attorney, often the attorney can negotiate the amount of the security deposit down for you, or they can make the electric company split up the payments for the deposit into tiny little monthly installments. That way, you don't have to come up with the $100, $200, or $300 security deposit all at once.

The vast majority of people who are behind on utilities DO NOT have to put up a deposit either before or after the bankruptcy. A very few of my clients over the years have had this happen, and in every case I was able to negotiate the deposit into installments for them.

In summary, do not hesitate to include utility bills in your bankruptcy!

Number one, you have to list all debts, even small debts, even debts to family members, and even those crazy utility bills.

Number two, it can save you a lot of money, because you wipe out all the old bills and just focus on paying the monthly payments going forward.