Can a utility service discriminate for filing of bankruptcy?
I have been asked this question many times, and I like to discuss this finally. A utility company (electric, water, disposal etc.) may not alter, refuse, or drop service to or discriminate against the the trustee or the debtor solely on the basis of the commencement of a case under the bankruptcy or that a debt owed by the debtor of such utility for service rendered before the order for relief was not paid when due. A denial like this would be plainly an act of discrimination.
However, such utility may alter, refuse, or drop service if neither the trustee nor the debtor which 20 days after the date of the order for relief, furnishes adequate assurance of payment, in the form of a deposit or to her security, for service after such date. On request of a party in interest and after notice and a hearing, the court may order reasonable change of the amount of the deposit or other security necessary to give adequate assurance of payment.
What is an assurance of payment?
It means cash deposit, letter of credit, certification of deposit, or a surety bond. A utility Company may require an assurance of payment by asking more security deposit. However, it is a wise idea not to include utility bills, and delinquencies in your bankruptcy papers unless you had moved out to a different town and does not need the same services again.
malik
