Clients come in to our office due to a variety of financial issues, it could be credit cards, medical bills, collection accounts, mortgage issues or lawsuits. The majority of our clients would be more than happy to pay their bills, but their current financial position prohibits them from doing so. In fact, sometimes their financial position even prevents them from paying for necessary everyday living expenses such as rent, gas, electricity and water.
DTE Energy, a major provider of electric and natural gas for metro-Detroit residents, offers a variety of payment programs for those struggling to make their monthly payments. One of the payment options, BudgetWise Billing, offers clients the ability to make the same payment each month. The intent is to help people deal with the seasonal ups and downs of your bill. This means, on any given month, you may have a credit or a balance with DTE even if you are current on your payment plan.
Most of our clients fit into one of the following three categories.
- First is the person who is current on their payment plan, but has a balance with DTE.
- Second is the person who is months behind on their DTE bills and facing shutoff.
- Third is the person who has an old DTE bill that has a balance.
Regardless of your specific situation, this blog is intended to examine how DTE Energy operates if you file for bankruptcy and have a balance on your DTE account.
How is a DTE Bill Handled in Bankruptcy?
Once a bankruptcy is filed, the automatic stay goes into place. The automatic stay prevents DTE from collecting on any balance owed to them. More importantly, especially in the winter months, it prevents DTE from shutting off your service.
In order to prevent violations of the automatic stay, which can have serious consequences, DTE uses a database to see if any of their clients who have an outstanding balance have filed for bankruptcy. If they find a person who has a balance, their current account will be closed and DTE will open a new account. Next, DTE will then send a notice requesting a client put down a deposit on the new account. This may seem like a violation of the automatic stay. However the bankruptcy code, specifically 11. U.S.C. §366, permits DTE to request adequate assurance payments in exchange for continued service. DTE claims the deposit amount is based on the last 2 months average usage. However, in our experience we have found that is not always the case and DTE may ask for more.
Receiving a bill for a security deposit payment frequently comes as a shock to clients who are current on their BudgetWise plan. The client typically does not list DTE because they do not believe a debt is owed, but due to the month their account is currently carrying a balance.
Understandably, this can be frustrating for our bankruptcy clients, but there are options. First, you can pay the deposit amount and the utility service will be kept on. Second, you can file a motion with the court to determine what the security deposit for DTE should be. If DTE responds to the motion, the judge will make a determination of what the security deposit is.
Thankfully, it is not all bad news. The deposit will be returned if you make all of your payments on time for 12 consecutive months.