Yes, utilities can be included in bankruptcy. Past-due electric, gas, water, and telephone bills are treated as general unsecured debts in both Chapter 7 and Chapter 13, and the moment you file, the automatic stay stops your providers from disconnecting service or chasing you for the old balance. In exchange, federal law gives you 20 days to post a security deposit for continued service and requires you to pay for anything you use after the filing date.
What the Automatic Stay Does to a Pending Shutoff
Filing your petition triggers a federal court order called the automatic stay. It bars your utility provider from shutting off electricity, gas, water, or telephone service to pressure you into paying a pre-filing balance, and it stops the collection letters and phone calls about that old bill.1Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay
If your service was recently cut off for nonpayment, the filing may force the provider to reconnect it. Most courts treat a refusal to restore service over a pre-petition balance as itself a collection act the stay prohibits. Give the utility your case number quickly so it can verify the filing. Reconnection does not erase the old debt; it just takes the shutoff off the table while the case is pending.
The 20-Day Deposit Deadline
The stay does not entitle you to free service going forward. Federal law lets the utility demand a security deposit, called adequate assurance of payment, to guarantee you will pay for service used after your filing date. You have 20 days from the filing date to provide it. Miss the deadline and the company can disconnect regardless of the automatic stay.2Office of the Law Revision Counsel. 11 U.S. Code 366 – Utility Service
The clock starts on the day you file, not the day the utility contacts you. Waiting for a demand letter is how filers end up scrambling in the final days.
What Qualifies as Adequate Assurance
The Bankruptcy Code recognizes several forms:
- A cash deposit, which is the most common form. Courts have approved amounts ranging from two weeks to two months of average bills, depending on the circumstances.
- A letter of credit from a bank guaranteeing payment on your behalf.
- A certificate of deposit held as collateral for the account.
- A surety bond from a third party guaranteeing future payments.
- Prepayment for a set amount of future service.
- Any other security both you and the utility agree to.
The statute sets no fixed dollar amount. If the utility demands a deposit you consider excessive and you cannot negotiate it down, either side can ask the bankruptcy court to set a fair amount based on the facts of your case.2Office of the Law Revision Counsel. 11 U.S. Code 366 – Utility Service
What Happens to the Old Balance
The fate of the past-due amount depends on which chapter you file.
Chapter 7
In Chapter 7, past-due utility bills sit in the same bucket as credit card and medical debt. When the court grants your discharge, the old balance is wiped out entirely and the provider cannot pursue you for it. A typical Chapter 7 case wraps up in three to four months.3United States Courts. Chapter 7 – Bankruptcy Basics
Chapter 13
Chapter 13 does not eliminate the utility arrears right away. The past-due amount is folded into a court-supervised repayment plan lasting three to five years, and you send a single monthly payment to a trustee who distributes it among your creditors. Whatever qualifying unsecured balance remains at the end of the plan, including any unpaid utility arrears, is discharged.4United States Courts. Chapter 13 – Bankruptcy Basics
Which Services Count as a Utility
Section 366 does not define “utility.” Legislative history points to providers that hold a local monopoly, services you cannot easily replace. Electricity, natural gas, water, and landline telephone service clearly qualify.
Cable television, internet, and cellular service are the gray zone. These providers often operate in competitive markets, and some courts have treated them differently from monopoly utilities. The pre-filing debt for these services can still be discharged, but the provider may not be required to keep serving you under Section 366. A cell carrier, for example, might terminate your contract or require new terms. If a particular service is critical, list the contract on your schedules and talk to the provider directly about your intent to keep paying.
You Still Have to Pay for Service After Filing
Bankruptcy only addresses debt that existed before you filed. Every kilowatt-hour and gallon you use after the filing date generates a new obligation that must be paid on time. These post-petition charges are outside your bankruptcy case, and falling behind on them gives the utility full authority to disconnect, automatic stay or not.2Office of the Law Revision Counsel. 11 U.S. Code 366 – Utility Service
Budget for current utility payments from day one. A missed post-petition bill can undo the breathing room the filing was supposed to buy you.
Repeat Filers Get Weaker Protection
If you had a bankruptcy case dismissed in the previous year and file again, the automatic stay lasts only 30 days in the new case unless the court extends it. If two or more cases were dismissed in the previous year, the stay does not take effect at all when you file, though you can ask the court to impose one.1Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay
Without a functioning stay, your utility has no obligation to pause a shutoff. If you are a repeat filer, getting a motion to extend or impose the stay filed promptly is essential.
If the Utility Ignores the Stay
A utility that disconnects your service or pursues a pre-filing balance while the stay is in effect has violated a federal court order. Under Section 362(k), a willful violation lets you recover actual damages, including attorney’s fees. Egregious cases can also draw punitive damages.1Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay
Actual damages in this context might include temporary housing after a winter heat shutoff, spoiled food from a power cut, or the cost of alternative arrangements while service was down. Willful does not require malice; it means the company knew about the filing and cut service anyway. Call your bankruptcy attorney the same day, because the longer a violation continues, the harder it gets to document what it cost you.