Olympia Fields Bankruptcy Lawyer

Olympia Fields bankruptcy lawyer states that you can list your utility bills on your bankruptcy if you are behind on those bills. The utility company can do a couple different things. First, they have to wipe out the debt that you incurred prior to filing the bankruptcy. I don’t care if it’s an electric bill, a gas bill, a telephone bill; as long as it is a utility, a necessary utility, that utility must eliminate the debt that you owed before the case was filed in the Chapter 7 bankruptcy case.

However, the utility company does have the right to ask for a small security deposit going forward to ensure future service. And by that I mean they don’t have to just wipe out the bill and allow you to make regular payments again. They can ask for a security deposit so they know they’re going to have something available if you don’t make your payments. This is true whether you file bankruptcy yourself or whether you hire an attorney.

In Chapter 13, the utility company is going to file a proof of claim which is a dollar amount that gets paid through the Chapter 13 plan. Thus the debt in Chapter 13 is not eliminated; it’s reorganized by being paid back either 100% on the dollar or less than 100% on the dollar in many cases.

A lot of people have cell phone bills these days in exchange for a home phone. A cell phone is not a utility that is required to be kept open or on by the cell phone company. Thus if you want to keep your cell phone active, you must continue to pay your bill and they do not have to allow you to keep that phone. However, if it’s a home phone, then they must allow you to keep it and they can ask for a small security deposit. This is true for any Illinois bankruptcy case.

I have many clients who after the case is filed under Chapter 7 notified me that they were past due on certain utility bills. As long as the case is still open and has not gone to discharge yet, I can amend the Schedule F and add that utility to their bankruptcy filing. I can then fax what’s called an Automatic Stay to the utility company notifying them of your bankruptcy filing. The utility company will not shut you off once they become aware of your bankruptcy filing unless you do not have the ability to make that small security deposit. The standard security deposit is approximately 1 1/2 times a normal month’s service. So if your electric bill is $50 per month, the utility company can ask for a security deposit of 1 1/2 times that which would be $75.

In some cases, we fight with the utility companies because they continue to threaten shutoffs despite the fact that they became aware of a Chapter 7 bankruptcy filing. In those cases, we contact the utility and put them on notice that if they shut off service or if they ask for an unreasonable security deposit, then we will bring an action before the bankruptcy court to make sure that they are sanctioned for that action.

Utility bills are easily eliminated when filing Chapter 7 bankruptcy. Utility bills are easily repaid in a Chapter 13 bankruptcy over the next three to five years. The individual debtor must continue to make current utility payments going forward or else be subject to a shut off just like they were subject to a shut off prior to filing bankruptcy.

Posted in Illinois Bankruptcy |