negotiating with utility company

[ben1381]

I filed for Chapter 7 on May 18 and I got notice from utility company that they want a deposit of $890 by June 28. I cannot afford such a high deposit and I believe the utility company violated the bankruptcy stay as well as local utility regulations by sending me 3 "final termination notices" in the past month ,two after May 18. On the same day that the request for security deposit came was one of the "final termination notices". Does anyone think I can negotiate a lower deposit? Any thoughts on this subject would be very help to me and I would think other forum users too.

[justbroke]

I filed for Chapter 7 on May 18 and I got notice from utility company that they want a deposit of $890 by June 28.

They are allowed to charge you a deposit under 11 USC 366 and the underlying State Public Utilities rules/laws. Wanting the deposit by June 28 is very generous.

I cannot afford such a high deposit and I believe the utility company violated the bankruptcy stay as well as local utility regulations by sending me 3 "final termination notices" in the past month ,two after May 18.

The Utility company should have created a new account. The old one should go away and never be heard from again. Even though you filed on May 18, it takes 7-10 days before some companies, like utilities, receive the notice of bankruptcy in the regular mail.

On the same day that the request for security deposit came was one of the "final termination notices". Does anyone think I can negotiate a lower deposit? Any thoughts on this subject would be very help to me and I would think other forum users too.

You can not negotiate a deposit. You may be able to contact them and ask them to allow you to pay it over time (3 months)?

Did you file pro se? If this deposit it burdensome, you can file an Emergency Motion to Set Deposit and allow the bankruptcy court to assist you. However, don't sit around doing nothing u8ntil the lights go out. They are perfectly within the law to terminate services 20-days after they request the "adequate assurance or payment" aka... the deposit. (11 USC 366(b))

If you filed pro se you may want to call them and see if you can spread out the deposit. If they won't, you may need to ask the Court to set the deposit (which they can). How much the Court will help you may depend on your payment history prior to filing.

Also, did they create a new bill or have you received a "new" bill yet? If so, is the pre-filing amounts on that bill?

I'm very well versed on this topic, so if you can answer those questions and if you have anymore, let me know.

[SMinGA]

Its a 2-edged sword when you file on debts such as utilities. Anything up to your file date gets discharged, and they must start a new billing account to keep your current/future charges apart from the old. But they CAN charge a deposit, and may disconnect for nonpayment if you don't pay going forward.

For that reason - its probably best to do whatever you can to have utility bills current at time of filing. In that scenario, they're not a debt so the ongoing account would not be impacted by the filing. I realize this advice is too little, too late for some - but may be useful to others?

I think contacting them to ask for payments on the deposit is the best approach.

[ben1381]

The issue I have is the AMOUNT of the deposit which is not specified in BK366. And they sent me 3 "final termination notices" in the last month with demand for prepetition usage one of them arriving ON THE SAME DAY AS THE REQUEST FOR DEPOSIT obviously mailed post petition. I also made a payment to them post petition which I hope they will apply to the deposit. I did not file pro se but I spoke to my lawyer's office and I hope to handle this part on my own. I was in arrears about $1000 but feel the utility company has violated the automatic stay several times.

[justbroke]

The issue I have is the AMOUNT of the deposit which is not specified in BK366. And they sent me 3 "final termination notices" in the last month with demand for prepetition usage one of them arriving ON THE SAME DAY AS THE REQUEST FOR DEPOSIT obviously mailed post petition. I also made a payment to them post petition which I hope they will apply to the deposit. I did not file pro se but I spoke to my lawyer's office and I hope to handle this part on my own. I was in arrears about $1000 but feel the utility company has violated the automatic stay several times.

Their violation of the stay on the pre-petition debt has nothing to do with a deposit requirement in the post-petition context.

Please answer my questions above and I'll try to put you down the right path. I'm concerned that you're pro se and that you don't understand the law.

[ben1381]

Justbroke,
I did NOT file pro se but I don't want to have my attorney spend his time on this matter and when I called his office he seemed OK with me handling this myself. I'm pasting what you wrote below with my additional comments.
Originally Posted by ben1381
I filed for Chapter 7 on May 18 and I got notice from utility company that they want a deposit of $890 by June 28.

They are allowed to charge you a deposit under 11 USC 366 and the underlying State Public Utilities rules/laws. Wanting the deposit by June 28 is very generous.

As I said before 11USC 366 refers to "an adequate deposit" but doesn't specify an amount.


Quote:
Originally Posted by ben1381
I cannot afford such a high deposit and I believe the utility company violated the bankruptcy stay as well as local utility regulations by sending me 3 "final termination notices" in the past month ,two after May 18.

The Utility company should have created a new account. The old one should go away and never be heard from again. Even though you filed on May 18, it takes 7-10 days before some companies, like utilities, receive the notice of bankruptcy in the regular mail.

The utility DID create a new account but sent a "final termination notice" on the old account at the same time. I also saw online a "final bill" on the old account and I'm waiting to see if they send this in the mail.


Quote:
Originally Posted by ben1381
On the same day that the request for security deposit came was one of the "final termination notices". Does anyone think I can negotiate a lower deposit? Any thoughts on this subject would be very help to me and I would think other forum users too.

You can not negotiate a deposit. You may be able to contact them and ask them to allow you to pay it over time (3 months)?

Why can't you negotiate the amount of a deposit when 11 USC 366 doesn't provide a formula for calculating the deposit and the utility violated the stay several times. I'm asking this not only for myself but for anyone viewing this forum who may be interested in this subject.

Did you file pro se? If this deposit it burdensome, you can file an Emergency Motion to Set Deposit and allow the bankruptcy court to assist you. However, don't sit around doing nothing u8ntil the lights go out. They are perfectly within the law to terminate services 20-days after they request the "adequate assurance or payment" aka... the deposit. (11 USC 366(b))

If you filed pro se you may want to call them and see if you can spread out the deposit. If they won't, you may need to ask the Court to set the deposit (which they can). How much the Court will help you may depend on your payment history prior to filing.

At this point I' m waiting for the person that sent me the letter to call me back. I'll let everyone know what happens.

Also, did they create a new bill or have you received a "new" bill yet? If so, is the pre-filing amounts on that bill?

I received a new bill over the weekend asking for the deposit.

I'm very well versed on this topic, so if you can answer those questions and if you have anymore, let me know.

[justbroke]

I did NOT file pro se but I don't want to have my attorney spend his time on this matter and when I called his office he seemed OK with me handling this myself. I'm pasting what you wrote below with my additional comments.

He's okay because there isn't a lot you can do since you're at the mercy of the Utility company. Perhaps the utility will allow you to spread out the deposit.

Why can't you negotiate the amount of a deposit when 11 USC 366 doesn't provide a formula for calculating the deposit and the utility violated the stay several times. I'm asking this not only for myself but for anyone viewing this forum who may be interested in this subject.

Because deposits are set by underlying State non-bankruptcy law. 11 USC 366(b) is all about "adequate" assurance of payment which is in the form of a deposit or letter of credit. Deposits are set accounting to your Public Utilities Commission (or equivalent). Generally, most PUCs use an average bill over the past 12 months, multiplied by 2.

At this point I' m waiting for the person that sent me the letter to call me back. I'll let everyone know what happens.

Okay.

I received a new bill over the weekend asking for the deposit.

Good.

[frogger]

In my area, there will not only not be a negotiation of the deposit, there will not be a payment plan.

Your payment plan will most likely be cash and up front.

I took all of that into consideration before filing on a utility company. I knew that there would be a deposit based upon usage going forward, and it was a deal for me.

7k bankrupted on a utility, and a $600.00 deposit. Worked for me!

[ben1381]

The lady from the utility company called me back today and she actually was very nice although I had to be firm with my negotiations with her. She also had to speak to her supervisor and called me back. We agreed on a $600.00 deposit payable by June 28. I'm sure it helped that I've already paid almost half of this. I had a utility bill due 6 days after I filed so I decided to pay it before receiving the deposit request with the assumption they would apply my post petition payment to the deposit. And it worked! I'm happy with the outcome.

[justbroke]

Very good news.