Consumer Protection

What Happens If You Can't Pay a Utility Bill?

Find out what you can do to prevent the utility company from turning off your service.

Everyone depends on water, electricity, telephone, natural gas, propane delivery, and garbage services to keep a household running. But utilities come at a cost. If you’ve run into financial difficulties and utility shutoff notices are filling up your mailbox, this article will explain what to expect, as well as provide information about options available to you.

Can the Utility Company Shut Off My Service?

Yes. It’s a common misconception that a utility company must provide services even if a customer doesn’t pay the bill (although protections are in place to maintain life-saving services—more below). A utility company can shut off your services for nonpayment as long as it warns you beforehand—and it can take measures to protect against financial losses in the future, too. As a result, you might have to pay a deposit—as well as the amount that you already owe—to get the lights turned back on. The company will hold the deposit in case you’re unable to pay in the future.

If You’ve Been—or Are About to Be—Disconnected

If you’re in danger of losing utility service, your first step is to contact your utility company. The customer service representative should refer you to local, state, and federal resources that will help you maintain your services.

Individuals and families with an income less than 150% of the federal poverty guidelines will likely qualify for emergency funding. (Your income can be higher in certain states.) If financial support isn’t available, the utility company might allow you to catch up through a payment plan. If you aren’t able to get the help you need, you might consider one of the programs described below.

Are You Protected From Disconnection?

State law protects consumers in need of life-saving services, such as water and power. The protections vary from state to state, but typically include:

  • No disconnection during the winter months or when the weather reaches a certain temperature.
  • No disconnection if the household contains a member who is elderly, disabled, seriously ill, or dependent on a life support system.
  • Postponement of disconnection if the consumer agrees to a payment plan.

You can find your state’s disconnection policy by visiting the Low-Income Home Energy Assistance Program (LIHEAP) State Disconnection Policies page.

Do You Qualify for a Grant?

You might be eligible for a monetary grant through LIHEAP, a federally funded program that helps low-income households pay for heating and cooling bills. Each state (and many tribal jurisdictions) have locally administered LIHEAP programs. To find the office nearest you, go to LIHEAP’s Get Help With Your Energy Bills page.

Applying for a Payment Plan

The utility company might let you catch up over time by putting you on a payment plan. For instance, it might agree to add a small amount of your past due balance to your monthly bill until you pay off the delinquent amount.

Another typical plan helps you budget efficiently by dividing your anticipated yearly cost into twelve equal payments. Paying the same amount each month insulates you from sudden service cost increases during summer and winter months.

Social Service Agencies, Charities, and Church Organizations

If you’re in immediate danger of being disconnected and can’t find the help you need, local social service agencies often provide short-term funds to maintain utilities. Local churches and charities also provide emergency help and will assist with rent, food, and clothing, too. To learn more, call a local social service agency, nonprofit charity, or church organization.

Bankruptcy Can Help

If you are behind on all of your bills, filing for bankruptcy might be an option worth considering. Not only will wiping out outstanding debt (including your overdue utility bills) infuse additional cash into your monthly budget, but the utility company cannot disconnect your services during the bankruptcy case. However, expect it to ask for a deposit after your case concludes.

If you’re unsure whether filing for bankruptcy is right for you, consult with a bankruptcy lawyer. (You can learn more by reading Choosing the Type of Bankruptcy: Chapter 7 or 13.)

Maintaining Services in the Future

Most utility companies have cost-reduction programs for low-income households. If you qualify, you’ll likely receive a 5-20% discount each month. Additionally, some utility companies will improve your home’s energy efficiency at no cost by installing such things as weather stripping, water-saving showerheads, and water heater blankets.

Questions for Your Attorney

  • Are there agencies in my area that can help me keep my utilities connected?
  • Can bankruptcy help me with my utility bill?
  • How can I postpone or defer my disconnection?

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