SUBJECT: Procedures for Bankruptcy Notice
This policy is designed to ensure the District promptly processes customer accounts during the bankruptcy period.
Assurance of Payment authorizes the utility to alter, refuse or discontinue service unless within 20 days of the petition date the debtor provides the utility “adequate assurance of payment” for post-petition service. USC Title 11 Section 366 unequivocally states that the utility can discontinue service if adequate assurance is not provided in the first 20 days of the case, although the court can order a modification if the utility and the debtor are unable to reach agreement on the assurance that was proposed. The act also permits the utility to set off or recover from a pre-petition deposit to pay a pre-petition bill without seeking relief from the automatic stay.
Attorney for the Debtor The attorney representing the debtor in a bankruptcy proceeding. The debtor can represent himself/herself during the bankruptcy.
Automatic Stay An injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection actions against the debtor the moment a bankruptcy petition is filed, with very limited exceptions.
Bankruptcy Filing Date The date the bankruptcy is filed and the beginning of the collection stay. It may also be referred to in a bankruptcy notice as “the Petition Date”. Bankruptcy Notice A notice provided by the bankruptcy court notifying the District of a bankruptcy.
Bankruptcy Trustee A person appointed by a bankruptcy court to supervise the affairs of person or business which is in bankruptcy, determine both assets and debts, marshal (gather) and manage the assets if necessary, and report to the court. Most trustees in bankruptcy are full-time professionals and are paid from the estates of the debtors.
Chapter 11 This is used mostly by businesses. In chapter 11, the business may continue to operate its business (as “Debtor in Possession”) , but its creditors and the court must approve a plan to repay its debts. There is no trustee unless the judge decides that one is necessary; if a trustee is appointed, the trustee takes control of the business and property.
Chapter 13 The debtor can usually keep the debtor’s property, but the debtor must earn wages or have some other source of regular income and the debtor must agree to pay part of the debtor income to the debtor creditors. The court must approve the debtor’s repayment plan and budget. A trustee is appointed and will collect the payments from the debtor, pay the debtor’s creditors, and make sure the debtor lives up to the terms of the debtor’s repayment plan.
Chapter 7 A trustee is appointed to take over the debtor’s property. Any non-exempt property of value will be sold or turned into money to pay the debtor’s creditors. The debtor may be able to keep some personal items and possibly real estate ( exempt property) depending on the law of the State where the debtor lives and applicable federal laws.
Lien The right to take and hold or sell the property of a debtor as security or payment for a debt or duty.
Proof of Claim A written statement and verifying documentation filed by a creditor that describes the reason the debtor owes the creditor money. (There is an official form for this purpose.)
Reaffirmation Agreement An agreement by a chapter 7 debtor to continue paying a dischargeable debt (such as an auto loan) after the bankruptcy, usually for the purpose of keeping collateral (i.e. the car) that would otherwise be subject to repossession.
Secured Creditor A creditor holding a claim against the debtor who, pursuant to a lien, has the right to take and hold or sell certain property of the debtor in satisfaction of some or all of the claim.
Approved: April 11, 2013