Consequences of Not Paying Your Final Electric Bill When Moving Out

Switching electricity providers is part of the moving process. But what if you move out without paying your final electric bill? Unfortunately, this can lead to collections, credit damage, and even legal action.

When vacating a property, it’s crucial to pay off any remaining balance on your electric account. Otherwise, you’ll continue to face consequences from your previous utility provider.

Overview of Closing Electricity Service

When moving out you must formally close your electric service with the provider servicing that property. This involves requesting that service be discontinued on your scheduled move-out date.

As part of closing your account, the electric company will send a final bill for all remaining charges up until the service end date This final bill may cover a partial month

It’s your responsibility to pay the closing bill in full. Unpaid final balances can be sent to collections. The account history can also impact your credit score.

Electric Company Collections Efforts

If you move without paying your last electric bill, the unpaid balance doesn’t simply disappear. The electric company has a legal right to pursue collection of the amount owed.

Collections efforts typically start 30-90 days after your move-out date if the final bill remains unpaid. A collections account on your credit report can stay for up to 7 years.

To collect an unpaid electric bill, the electric provider may take these types of actions:

• Sending notices by mail demanding payment
• Turning account over to a professional collections agency
• Placing derogatory marks on your credit reports
• Suing you in court to garnish wages or levy bank accounts
• Charging late fees and interest on the balance owed

Collections can also impact your ability to open new electric service in the future. Many providers check credit and previous utility records before starting new service.

Credit Score Impacts

Your credit score will suffer if your past due electric account is referred to collections or reported to the credit bureaus.

A collection item can instantly drop your credit score by 100 points or more. Poor credit makes it harder to qualify for loans, credit cards, apartments, and jobs.

Even after you eventually pay the past due bill, your credit won’t instantly recover. The collection mark will continue dragging your score down for up to 7 years.

Legal Action

For large unpaid balances, the electric company may sue you in civil court after other collection methods fail. If they receive a court judgement against you, potential outcomes include:

• Bank levies – Seizure of funds from your bank accounts
• Wage garnishment – Seizing a portion of your paychecks
• Property liens – Legal claim on your property until debt is settled

Lawsuits and property liens can wreck your finances. They make it extremely difficult to rent an apartment, get a mortgage, or access new credit.

Be aware that electric companies can pursue legal action across state lines. Moving out of state won’t necessarily protect you from lawsuits related to unpaid utility bills.

Long-Term Eligibility Impacts

Beyond damaged credit, not paying your final electric bill can restrict your eligibility for services in the future.

Many electric providers require security deposits for new customers with poor previous utility account histories. You may also have trouble signing up for accounts in your name.

Past due debts can come back to haunt you even years later when you need new electric service. Always pay final bills to avoid future eligibility issues.

Options for Settling Past Due Accounts

If your electric account is referred to collections, you will need to eventually pay the amount owed. Some options include:

• Payment plan – Set up installment payments with the utility or collection agency
• Pay for delete – Offer lump sum payment in exchange for removing collection mark if electric company agrees
• Settlement – Negotiate discounted lump sum to have account marked “Paid”
• Bank loan – Borrow funds to pay off collection balance in full

Restoring your credit takes time after an unpaid utility collection. But paying it off stops further damage and paves the way for future improvement.

Avoiding Final Bill Issues When Moving

To prevent problems with unpaid electric bills when moving, be sure to:

• Notify your electric provider well in advance of your move-out date
• Provide a forwarding address so they can send your final bill
• Pay the full balance by the due date
• Confirm service is formally closed
• Keep records showing your account was paid in full

Following proper utility shut-off procedures as part of your move-out process will ensure a clean break. Never skip that final electric payment.

Impact on New Tenants or Landlord

If you leave an unpaid electric bill behind when moving out, it could potentially impact the next tenant or landlord renting that property.

In some cases, the electric company may refuse to initialize new service until the previous debt is resolved. Or the balance due may be unfairly pushed onto the landlord if you cannot be contacted.

So leaving unpaid utility bills can create headaches for innocent parties. Close accounts properly when moving out to avoid causing problems for others down the line.

The Cost of Irresponsibility

While it may seem tempting to walk away from utility bills when moving, doing so has serious financial consequences. Collections, lawsuits, credit damage, and eligibility restrictions will haunt you long after you abandon unpaid electric debts.

Act responsibly when switching properties by formally closing electric accounts and paying final balances on time. Otherwise, you risk your financial reputation and creditworthiness for many years to come. Don’t let an unpaid utility bill ruin your finances.