Utilities in Chapter 7

[MIGirl]

I did not include my gas and electric company in my filing, but they must watch to see who is fling. They sent me something about a new account and wanting a deposit. I had a deposit with the old account, what happens to that?

thanks!

[justbroke]

They can apply the "old" deposit to the "old" pre-bankrutpcy acocunt. This is known as a right of set off. A bank or creditor can setoff a prior debt (prior to filing) with a pre-petition deposit without any permission from the bankruptcy court.

I am very familiar with this section of law, 11 USC 366(c)(4) which provides that "notwithstanding any other provision of law, with respect to a case subject to this subsection, a utility may recover or set off against a security deposit provided to the utility by the debtor before the date of the filing of the petition without notice or order of the court."

I don't know how your utility company ended up on your mailing matrix, but somehow they received notice. You may have fewer than 20 days to provide the deposit. You "may" be able to ask them to split the deposit over a few months, but they are not required to allow the delay in paying the deposit. They can terminate or suspend your services if you fail to pay the new deposit or make suitable arrangements. In some cases, you may be able to appeal to the court to have the deposit reduced, but most judges will defer to what the utility company tariff allows for deposits.