How Are Utility Bills Treated in Bankruptcy?

Debt from past due utility bills are generally discharged (wiped out) in bankruptcy. Here's how it works.

By , Attorney · Northwestern University School of Law

If you are behind in your utility payments and file for bankruptcy, you can discharge the outstanding bills in Chapter 7 bankruptcy and repay outstanding bills through your repayment plan if you file for Chapter 13 bankruptcy. Here's how it works.

Utility Bills in Chapter 7 Bankruptcy

In Chapter 7 bankruptcy, most types of unsecured, nonpriority debt will be discharged (wiped out) through the bankruptcy. (To learn more about unsecured priority and nonpriority debt, see Unsecured Debt: Priority vs. Non-Priority.) Utility bills are lumped into this type of debt, along with credit cards and medical debt. At the end of your Chapter 7 case, your outstanding utility debt will be discharged.

Utility Bills in Chapter 13 Bankruptcy

Back due payments on utility bills will be lumped into your unsecured, nonpriority debt in a Chapter 13 bankruptcy case. This debt will be paid through your Chapter 13 repayment plan. In most Chapter 13 bankruptcies, debtors pay off only a portion of their unsecured debt through their plan. To learn how the repayment plan works, and how much unsecured debt will be paid off, see The Chapter 13 Bankruptcy Repayment Plan.

During the Chapter 13 bankruptcy repayment plan period (which lasts either three or five years), you must keep up with your current utility bills.

Your Utility Bills After Bankruptcy

After bankruptcy, you must continue to make your regular utility payments. The bankruptcy does nothing to discharge current or future payments. If you fail to pay your utility bills, they will eventually be shut off.

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