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New Jersey hospital emerges from bankruptcy, still owes utilities

On Behalf of | May 27, 2011 | Chapter 13 |

A New Jersey hospital’s bankruptcy filing has led to much contention for the local water utility company. According to hospital officials, a plan has been set into motion to repay the past due bill. Although the hospital came out of the bankruptcy with a complete resettlement plan within one year of its 2009 filing, negotiations over back water and sewer payments have continued.

St Mary’s Hospital is located in northern New Jersey and is currently indebted to the Passaic Valley Water Commission and the city of Passiac for water and sewer payment delinquencies. Reports confirm that the hospital owes $350,000 for sewer charges and $252,000 for water charges. The total debt comes to just over $600,000.

The executive director for the water commission told New Jersey reporters that it’s not uncommon for hospitals to become delinquent on payments. Reportedly, the Passaic Valley Water Commission maintains a customer base of nearly 70,000 people. Because the PVWC is known as a secure creditor, the company is enabled to seek remittance in the full amount that is owed.

The hospital purportedly halted payments to the water company well prior to filing for bankruptcy. However, payments since March of 2010 have remained current. A hospital spokesperson has confirmed that negotiations have taken place to determine an appropriate repayment plan to cover past debts.

The water commission did not cut off service to the hospital for fear of causing harm to patients. As a result, the delinquent bills began to accumulate month after month. The water commission’s executive director told reporters that the hospital’s bill averaged around $25,000 per month.

If you find yourself facing bankruptcy, it can be very overwhelming. However, bankruptcy can be an appropriate solution to mounting debt for some individuals. If you are considering filing for bankruptcy, seeking experienced legal advice may be beneficial.

Source:, “Hospital runs up hundreds of thousands in unpaid water bills,” Richard Cowen, 18 May 2011


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