If you are currently behind on one of your utilities when you file a bankruptcy, we want to list that utility on your bankruptcy schedules, states Evanston bankruptcy attorney David Siegel. The utility company will then get the bankruptcy notice, it will wipe out any prepetition debt and it will restore service or continue service provided you give some sort of reasonable assurance of payment.
Section 366 of the United States Bankruptcy Code talks about utility service and the continuation or discontinuation of utility service. If you have the ability to put down a down payment, whoever has terminated service will have to reinstate service. In the majority of my cases with clients, the electric bill or the gas bill or the phone bill is simply eliminated as to the date that the case was filed and my client is responsible for the date of filing going forward. So if someone had an electric bill for $800 and they filed on February 6, anything from February 6 backwards would be eliminated and my client would be responsible for February 7 and on.
If the utility company feels that you don’t have the ability to pay going forward, they do have a right to ask for a reasonable security deposit which is typically about one to 1 1/2 times what a normal month would be. So in the case where someone had an $800 debt that they eliminated and the normal bill was $100, you can look for anywhere from a $100-$150 security deposit to ensure future service to prevent the utility company from not turning your back on.