Rent and fuel bills should have top priority! Paying rent is more important that paying off debts (however much pressure the collection agency may be putting on you....)! Rent arrears threaten your existence because in the final event you face compulsory eviction and homelessness! It is in your own interests to make sure that rent and fuel bills are paid regularly.
Set up a standing order with your bank or arrange for the employment office or social services department (Sozialamt) to transfer your rent directly to the landlord.
If you are in arrears with payments, your fuel supply company (EVU) cannot simply cut off the supply overnight.
The following prerequisites must be fulfilled:
- Reminder: Your supplier must have sent you a payment reminder.
- Threat of disconnection: The supplier must threaten you with disconnection (no set form). (Usually done together with the reminder, which is allowed.)
- Period of 4 weeks' grace: You are given a period of grace of 4 weeks from receipt of the threat of disconnection.
- Notification of the disconnection: You must be notified again at least 3 working days in advance that the supply is going to be cut off.
- You must owe at least 100 € (for electricity).
a) Agree an extension of the payment period or payment in instalments!
If you can see that you will not be able to pay the regular instalments or the outstanding amount billed in the annual statement punctually, you should tell your supplier immediately and explain the reasons for your temporary payment difficulties. Many suppliers will show understanding and agree to the outstanding amount being paid in instalments. However, the arrears from the previous year must be paid at the latest before the next annual statement is sent.
It may be possible to pay the amount in one lump sum when you get your holiday or Christmas bonus or a tax refund, for example.
b) Explain the hardship that would result if your fuel supply was cut off!
The supply cannot be cut off if the disadvantages would be particularly severe in relation to your arrears. In principle, suppliers should take the consequences into account automatically, but nevertheless you should inform them of the foreseeable disadvantages immediately.
Examples: Young children, sick, disabled or elderly persons under your care would be put at risk; health risks due to lack of heating, home dialysis, artificial respiration equipment; threat to means of existence (e.g. work at home; examination projects, theses etc..
But: Even if such reasons exist, the monthly instalments still have to be paid, otherwise, in the end, the supply will be cut off!
c) Submit evidence to prove that you will be able to meet payments in future!
Suppliers are not allowed to cut off the supply if you, the customer, can convincingly prove that you can settle all the arrears. You should go directly to the social services office in your town or district and apply for a loan to cover fuel debts. The legal basis for this is Book XII, § 36 of the German Social Code which is intended to protect people against the loss of their homes. The disconnection of the fuel supply is recognised as a „comparable emergency situation“.
If you draw unemployment benefit II (Hartz IV), you should inform your personal advisor at the employment office or job centre about the threat to cut off your fuel supply and apply for them to assume your arrears in the form of a loan.
The legal basis for this is § 22 5 of Book II of the German Social Code. The department will check whether the situation is really an emergency (e.g. small child, no heating in winter) and why you are in arrears.
§ 22 5 of Book II of the German Social Code does not foresee any reduction in future unemployment benefit II payments. If you have entered into an agreement to pay instalments, this is voluntary and can (even if it is described as irrevocable) be terminated with future effect at any time if the remainder of the social benefits is not enough to live on.
Remember: Send your supplier a copy of the application for your fuel debts to be assumed by the social services department!
The fuel supply must be reconnected immediately the arrears are settled. However, you will have to pay a disconnection and reconnection fee. Your supplier may also demand a deposit (German: Kaution). Alternatively, it is possible they may suggest a prepaid solution, for example a prepayment meter.
If you cannot pay your arrears and if the authorities refuse to assume the fuel debts for you, one solution could be to change the supplier. The new supplier must reconnect you to the grid. However, some suppliers refuse to conclude contracts with persons with a poor credit record (in Germany: negative SCHUFA report). It may also be more than one calendar month before fuel is supplied on the basis of your new account.
Remember: A change of supplier may be the solution in individual cases, but if you do not pay your bill from the new supplier, you risk being charged with fraud!