Dealing with Arrears on Utility Bills
How and Why It Is Important to Clear a Gas and Electricity Bill
Nov 30, 2008
Arrears on utility bills constitute a priority debt because it is possible for a utility supplier to cut off a customer for non payment. Gas and electricity suppliers are likely to be more sympathetic to a customer's plight if they are kept informed and ways are found to reduce any outstanding arrears.
Arrears On a Gas and Electric Bill
All utility suppliers are obliged to adhere to standard licence conditions in terms of clearing arrears on a gas and electric bill. This essentially means that gas and electricity companies must offer the customer an affordable repayment schedule on any outstanding debt.
If utility suppliers ask for repayments that aren't affordable it is possible to challenge this. In order to do this, the gas and electricity companies will require a full breakdown of income and expenditure so it can be derived how much can be afforded.
If gas and electricity companies try to make a customer pay back more than can be reasonably afforded there is a strong possibility that they are transgressing their licence conditions. Don't simply agree to pay an amount that isn't affordable.
Ways to Clear Arrears On a Gas and Electric Bill
- Short term plans. If no history of arrears exists with utility suppliers, it is possible to work towards a repayment plan to settle any utility bills before the next bill arrives. There is no compulsion for the full amount of arrears to be settled in this way, but it is an option.
- Payment plan. This involves paying any arrears by a series of instalments whilst paying for any fresh energy usage via a gas or electric meter. Again, there is no obligation to pay more than can reasonably be afforded.
- Gas and electricity pre-payment meters. If facing disconnection and have been unable to stick to a repayment plan, it is possible that a pre-paid gas and electric meter will be introduced. The pre-payment meter will also allow the customer to gradually decrease any arrears.
- Deductions from state benefits. It is possible to arrange for third party deductions to be taken directly from benefits in certain situations. This can be arranged by speaking to the relevant utility suppliers, as well as Job Centre Plus.
Disconnection By Utility Suppliers
A utility supplier cannot send a disconnection notice until 28 days after a bill. After the disconnection notice, gas and electricity companies must provide customers with a further 7 days notice in writing before disconnecting anyone. Disconnection is only likely to happen if the current bill isn't paid and nothing is done about the arrears.
Different interpretations are likely to be applied for vulnerable customers. Vulnerable customers include those: of pensionable age, who are disabled, in long tern poor health and also with serious financial and debt problems. It is important to tell utility suppliers if a vulnerable customer.
It is imperative that customers talk to utility suppliers when they fall behind with payments on their gas and electric bill. If debt problems are an issue, consult a free debt counsellor at the Citizens Advice Bureau. There are a number of ways to reduce spending or even earn a useful second income and each of these methods could potentially turn financial difficulties around.
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