If you're facing an imminent shut-off of a vital utility service, such as gas, water, or electric service, or you're having trouble affording your utility bills, there are ways to get help. This article outlines some of the programs and laws available to reduce your utility bills or prevent utility disconnection.
If you miss one month's utility bill—including a bill for heating oil or gas deliveries—you probably won't hear from the company, unless you have a poor payment history. If you ignore a few past-due notices, however, the company will threaten to cut off your service.
If that happens, you must act quickly. Here are some things you can do to prevent the cut-off, or to lower your bills so you can catch up and better afford future payments.
Call the company before the threats become dire. Most utility companies will let you get two or three months behind as long as you tell them when you'll be able to make up what you owe. If your service has been shut off, the company will most likely require you to make a security deposit—usually for about three times the average of your monthly bill—before it reconnects you. The deposit rates following disconnects are regulated in some states. You may want to call a Legal Aid or Legal Services office to learn about your state's law.
Many utility companies offer reduced rates and payment plans to elderly and low incomepeople. In addition, the federal Low-income Home Energy Assistance Program (LIHEAP), which is state run, helps low income customers pay their utility bills. Don't assume you won't qualify as low-income.
To find out if you qualify and where to apply:
If you qualify for one of these programs, you'll be able to get future bills reduced—and may be able to spread out payments on past bills.
Some consumers fall behind on energy bills during periods when they use a lot of energy and incur high bills—winter in the north, for example. Many energy utilities offer programs that average your periods of high and low usage and allow you to pay uniform monthly payment all year long.
Most northern states prohibit termination of heat-related utilities during the winter. Other states protect households with elderly or disabled residents, and occasionally households with infants. Usually, you must show financial hardship to qualify. But, even if you qualify for a prohibition against utility shutoff, you'll still owe the bill.
Finally, don't overlook the cost savings that come with conserving energy. Local utility companies offer utility conservation assistance programs, often at no cost. These measures can often cut your bill by as much as one-third to one-half.
Filing for bankruptcy can provide a temporary stop to a utility shut-off, but you'll have to provide some proof that you can pay future bills if you want to keep the termination at bay permanently. To learn more, see Using Chapter 7 Bankruptcy to Prevent a Utility Shut-Off.
For more information on avoiding a utility shut-off and strategies for getting out of debt, get Nolo's Solve Your Money Troubles: Strategies to Get Out of Debt and Stay That Way, by Amy Loftsgordon and Cara O'Neill.
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