Can utility companies shut off service during bankruptcy?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 15, 2021

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A utility company may not shut off service solely because you file bankruptcy or because you owe them money at the time you file. However, if you or the bankruptcy trustee does not give them an adequate deposit or other assurance of payment within twenty days after filing, the United States Bankruptcy Code allows them to shut off service. What is considered adequate assurance will depend on your jurisdiction and your situation. A letter of credit or a surety bond are sufficient under the Bankruptcy Code, but can still be subject to the approval of the bankruptcy court if the utility company objects to the sufficiency of your assurance. The type of assurance you offer may also be limited by state law, in that your state may not all certain kinds of utilities to demand or accept deposits.

In addition to protection under the Bankruptcy Code, state utility regulations frequently have provisions that restrict utility shutoffs. For example, your state may not allow an energy company to shut off service during the winter months if that would deprive you of heat. If your utilities are cut off before or during bankruptcy, your bankruptcy attorney can petition the court to order the utility company to reactivate your service.

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