Bankruptcy & Utilities

Energy costs are high in Minnesota, and many Minnesotans have trouble keeping up. Utility bills can cause financial distress, and a disconnection notice can bring financial pain to a real and immediate point. Having your utilities shut off can compound the sense of hopelessness that many people feel when struggling with their finances. The good news is that your utilities are highly regulated.



Your utilities (other than municipal water and sewer) are an unsecured debt and can be discharged in bankruptcy. This means that you get essentially a fresh start with your utility company. Immediately after your bankruptcy petition is filed, your utility company is prohibited from disconnecting your service. Additionally, if your service has been disconnected, you can have it reconnected immediately after your bankruptcy petition is filed once you pay the reconnection fee. If you did file bankruptcy on past-due utility bills, you may need to make a refundable deposit with the utility company in the amount of 60 days of utility use as a condition of continued utility service.

Aside from bankruptcy, there are several important laws that all Minnesotans can take advantage of when dealing with their utilities:


Minnesota law requires utilities to continue service or reconnect service to a customer if the customer needs electricity to sustain life or if there is a medical emergency. If you are dependent on medical equipment to sustain life, or the loss of your utility service could lead to a medical emergency in your home, you should contact your utility and make sure that your utility knows of your medical condition. Request any special paperwork that the utility needs to ensure that the utility will know and have a record of your medical condition. You may need to have your health care provider give specific information to the utility to explain your condition and why the continuation of your utilities is medically necessary.


One of the most important laws in Minnesota regarding utilities is the cold weather rule. Minnesota created the cold weather rule to help families who cannot pay their heating bill in full avoid disconnection during the cold weather months. The cold weather rule applies from October 15 to April 15. While it does NOT prevent disconnection during these times, it does give customers extra protection from disconnection. Before disconnecting service between October 15 and April 15, the natural gas and electric companies must provide you with:

  • Notice of disconnection
  • Payment plan options to stop a disconnection
  • Appeal rights if you and the utility cannot agree on a payment plan
  • A list of local energy assistance and weatherization providers
  • A list of no-cost and low-cost methods to conserve energy
  • A Third Party Notice form 

If you get a disconnection notice during the cold weather rule months, you can prevent disconnection in one of several ways:

  • You can set up a payment plan with the utility. So long as you stay current on your payments, they cannot disconnect your service. 
  • You can get low-income energy assistance through your county to help cover some of the cost of your utilities.
  • If you are below 50% of the median income, your cold weather rule payment cannot exceed 10% of your household income.  

Delivered fuels such as propane and fuel oil are not covered by the cold weather rule.


Minnesota law requires utilities to offer customers the option to make monthly payments based on an annual budget. A budget billing plan is based on your average monthly energy usage over 12 months, and sets a single, level payment amount based on that average usage. This is an excellent option for individuals on fixed income.  

Past-due utility bills can be divided over a series of months and added into the monthly budget plan to help customers catch up on their utilities over time.


There are a number of energy assistance programs you may qualify for. Your first step will be to contact your utility company to ask about any energy assistance programs they offer. Your local county social services agency also has some heat and energy assistance programs available. Finally, the Minnesota Department of Commerce administers the federal Low Income Heat and Energy Assistance Program (LIHEAP) which provides heat and energy assistance to individuals who have income below 50% of the median income.


You can ask your gas and electric utilities to perform a free energy audit.  They can review your energy use, review your home’s infrastructure, and make recommendations on what changes or improvements you can make to reduce your monthly utility bills by a significant amount.

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