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RELEVANT LINKS: <br /> <br />League of Minnesota Cities Information Memo: 6/22/2016 <br />Securing Payment of Utility Charges Page 36 <br /> <br /> Consult the city attorney for specific legal advice if a city resident or <br />business with delinquent utility charges files any type of bankruptcy <br />proceeding. <br />Federal Rules of Bankruptcy <br />Procedure 3002 (c) (1). Municipal utilities must file claims in bankruptcy proceedings according to <br />federal rules. A proof of claim filed by a governmental unit is timely filed <br />if it is filed no later than 180 days after the date of the order for relief. On <br />motion of a governmental unit before the expiration of such period and for <br />cause shown, the court may extend the time for filing of a claim by the <br />governmental unit. <br /> A. Chapter 11 or 13 <br /> Initially, utility service may not be shut off, or charges certified to taxes, <br />when a property owner with delinquent bills files a bankruptcy petition <br />under either Chapter 11 or Chapter 13. <br /> A utility may not alter, refuse, or discontinue service to or discriminate <br />against the trustee or the debtor solely on the basis of the commencement <br />of a case, or that a debt owed by the debtor to such utility for service <br />rendered before the order for relief was not paid when due. <br />11 U.S.C.A. § 362. The petition for bankruptcy invokes an “automatic stay” that is applicable <br />to utilities and prevents: <br />11 U.S.C.A. § 362(a) (6). • Any act to create, perfect, or enforce any lien against property of the <br />estate. <br />• Any act to create, perfect, or enforce against property of the debtor any <br />lien to the extent that such lien secures a claim that arose before the <br />commencement of the case under this title. <br />• Any act to collect, assess, or recover a claim against the debtor that <br />arose before the commencement of the bankruptcy case. <br />• The setoff of any debt owed to the debtor that arose before the <br />commencement of the case under this title against any claim against the <br />debtor. <br />11 U.S.C.A. § 366 (c) (2). <br />2005 A.L.R. Fed. 2d 3. 83 <br />A.L.R. Fed. 207. <br />Congress updated bankruptcy law in 2005. Now, for Chapter 11 <br />bankruptcies, a utility may alter, refuse, or discontinue utility service, if <br />during the 30-day period beginning on the date of the filing of the petition, <br />the utility does not receive from the debtor or the trustee adequate <br />assurance of payment for utility service that is satisfactory to the utility. An <br />assurance of payment must be one of the following items: A cash deposit. <br />A letter of credit. A certificate of deposit. A surety bond, prepayment of <br />utility consumption.