A utility shutoff notice can accelerate an already difficult financial situation. For New Jersey residents dealing with debt, filing for bankruptcy activates a federal protection under 11 U.S.C. § 366 that can prevent shutoffs and help you maintain access to water, electricity and gas while your case is pending – provided you address the utility’s right to receive adequate assurance of payment for future service.
How federal law protects your utility service after filing
Under 11 U.S.C. § 366, a utility generally cannot alter, refuse or discontinue service solely because of a debt that arose before you filed for bankruptcy. If the utility does not receive adequate assurance of payment for future service, however, it may alter, refuse or discontinue service 20 days after the debtor files the bankruptcy petition.
Restoring services after a shutoff
If a utility service was discontinued before you filed for bankruptcy, you may be able to seek restoration. However, simply providing proof of your bankruptcy filing is typically not enough. To have service restored, you will need to contact the utility and provide proof that you can cover ongoing service costs – typically a security deposit.
Several forms may be acceptable depending on the circumstances:
- Security deposit: A common form of adequate assurance
- Prepayment arrangement: Paying ahead for future service
- Letter of credit: A financial commitment from a bank backing your payment obligations
Each of these options gives the utility financial security for future payment, which is the core purpose of the provision under federal bankruptcy law.
The utility is not required to restore service automatically, but offering assurance promptly gives you the best opportunity to negotiate reconnection. If the utility does not restore service and you believe it is required to do so, you may need to seek the bankruptcy court for appropriate relief.
Why timing matters after you file
The 20-day window under 11 U.S.C. § 366 is brief, and meeting this requirement quickly can determine whether your utilities remain on during your bankruptcy case. If the provider has already disconnected your service, you gain the strongest position to pursue restoration by acting before that window closes. A New Jersey bankruptcy attorney can help you identify the right timing, determine an appropriate form of adequate assurance and communicate with your utility provider promptly after filing.