How do I pay my utility bills in Sequestration?
We consider what happens to your gas, electricity and other utility bills if you go into Sequestration (Bankruptcy) and how you can continue to pay these.
If you go Bankrupt this does not mean that you lose control of your day to day finances. In fact your income will still be paid to you as normal and you will be expected to manage your own money.
It is your responsibility ensure you keep up the payments for everything on your agreed living expenses budget including your utility bill payments. You are allowed to have a bank account with standing orders and direct debits to help you control your finances.
Paying Gas, Electric and Water Bills while in Sequestration
Many people chose to pay for their utility bills such as electricity gas and water on a monthly direct debit. If you go bankrupt you can continue to maintain the same direct debit arrangements with your utility suppliers.
If you pay any of your utilities quarterly or even six monthly (which is sometimes the case for water bills) you will be allowed to save money each month from your budget so that you have the cash available to pay these bills as and when they become due.
It will be your responsibility to make sure they are paid so you must save the necessary amount each month.
Paying for telephone expenses during Sequestration
Paying for your landline telephone and for a reasonable broadband service is seen as an acceptable expenditure if you are bankrupt. As with your electric and gas bills, you can pay for your landline and broadband services on a monthly basis via direct debit from your bank account.
If you have a mobile phone on contract, even though this is technically a credit agreement you will be allowed to continue to pay your contract and use you phone as long as the monthly payment amount is reasonable.
Having said that though, it is important to understand that it is unlikely that you will be able to take a new contract with a different mobile provider or do anything else that will require you to pass a credit check.
If you come to the end of your mobile contract while you are in sequestration and want to change to a different provider you will probably have to choose a pay as you go service.
A tip if you are currently in a mobile phone contract that you no longer want or can afford is that you could simply stop paying this. Any outstanding payments will still be claimed by your mobile contract provider. However these can then be included as a creditor in your sequestration.
Do you want help with Sequestration? Give us a call on 0800 077 6180 or complete the form below to speak to one of our experts
Paying your car insurance during Sequestration
If you pay your car insurance payments on a monthly basis, like a mobile phone contract this is technically a credit agreement.
However it will be acceptable for you to continue to pay your car insurance on a monthly basis if you are sequestrated as this is a sensible way of budgeting for this expenditure.
The only issue you may face is when your insurance comes up for renewal. If you want to continue to pay monthly you may have to stick with the same insurer. Trying to move to a different insurer and asking to pay monthly may result in a check on your credit rating which you are likely to fail.
What happens to utility bill arrears in Sequestration?
If you are in arrears with any of your utilities at the time you go bankrupt, the way they will be dealt with will depend on the nature of the arrears.
Where your arrears relate to utilities at a previous property, then they will be simply included as debts in your sequestration and you will not have to make provision to pay these from your living expenses.
If the arrears you have are relating to utilities at the property where you currently live and are relatively small, then it is likely that you will be able to add a budget for repaying them into your bankruptcy living expenses budget.
Larger amounts of arrears for utilities at your current property may be treated as debts to be included in your sequestration as long as this will not jeopardise their ongoing supply.
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