Bankruptcy Law: Is bankruptcy a good option for utility disconnections?
By SUSAN CRESS BROWNING | SEPTEMBER 26, 2020
Many prospective clients of the firm are experiencing actual or threatened utility cutoffs due to income disruption caused by the COVID 19 crisis. Many calls to our office are exploring bankruptcy as an option to address their predicament. This article addresses alternate solutions and whether bankruptcy is a good option for utility disconnections.
COVID 19 has had far reaching and unprecedented financial effects on our communities. Due to layoffs, furloughs, and shutdowns, we have seen a showing of togetherness and unity (community concern) as our leaders have come to the aid of those less fortunate and provided financial assistance. We have seen income assistance by way of unemployment payments, PPP, and COVID stimulus payments. In addition, we have seen moratoriums on foreclosures, evictions and utility disconnections. Fortunately, the two former have been extended until the new year. However, many areas are seeing the end of a moratorium on utility shutoffs and an increase in disconnection notices. The purpose of this blog is to make the consumer aware of what options may be available in and out of the bankruptcy arena.
Kentucky Utility Shutoffs
In Kentucky, the moratorium put in place on March 16, 2020 has been lifted as it applies to non-residential customers effective, October 20, 2020. However, the Kentucky Public Service Commission is requiring utility companies to provide payment plans of at least six months to residential consumers who are behind due to COVID-19. For those of you facing arrearages please contact your utility company to set up a payment plan. In addition, these links will connect you with Kentucky Community Action and Kentucky Cabinet for Health and Family Services where you will be directed to further resources.
Ohio Utility Shutoffs
Ohio, however, has lifted the moratorium as to utility disconnections and customers are beginning to receive shutoff notices. This has prompted a spike in phone calls to our office regarding what can be done prevent disruption of utility service. If utility arrearages are your main concern, it makes sense to attempt to remedy the situation outside of bankruptcy first and leave bankruptcy as your last resort. First, contact your utility provider to inquire as to whether they offer a payment plan and what those payments might entail. If the plan provided is not feasible for your budget, consider contacting a local social services agency to determine if you qualify for their assistance programs. These links will connect you to Ohio’s website for Home Energy Assistance Program as well as their list of social service agencies by county.
As we all know, there is a sense of urgency when you receive a disconnection notice for your utilities. If you find that you are not receiving the assistance you need, do not qualify for assistance or have insurmountable additional debt, bankruptcy may be an option. Utility arrearages may be included in bankruptcy as a dischargeable debt. One caveat is that once you file for bankruptcy, you will be required to place a deposit with the utility company to begin a new account. In many cases, this is a small amount to pay in comparison to the mounting utility bills some debtors face.
If you are experiencing financial hardship and would like further information about the bankruptcy process, please contact Susan Cress Browning (513.797.2857) at Finney Law Firm, LLC for a FREE CONSULTATION. I will discuss your financial situation with you to determine what options you have and what is the best direction to take to resolve your debt issues.