Can I still file bankruptcy if the government shuts down?

With the threat of a shutdown of the federal government looming, a question on the mind of those planning to seek bankruptcy relief is what happens to the bankruptcy system in the event of a shutdown.

The Bankruptcy Courts are federal courts, and like all federal courts have the possibility to be impacted by a shutdown. There would be no immediate impact, as the courts have announced that they have the ability to continue for at least 10 working days. This is possible because the judiciary is funded both by congressional appropriation (which is the subject of the shutdown), and by fee-related revenue, such as filing fees. Bankruptcy filing fees represent a significant portion of the fee revenue for the court system.

In a longer-term shutdown, things become more complicated. The most likely result is that time sensitive functions would proceed and other matters would get deferred. For example, I suspect the ability to file a case, which the timing of which can occasionally be very important, would continue in almost all events. Other functions, such as the processing and hearing of routine motions would more likely get deferred into the future. I understand federal law to prevent the suspension of bankruptcy judge's salaries. However, having judges available is only useful to the extent the court administration is able to pay sufficient staff to provide for local court function.

In short, there's no reason for anyone in bankruptcy or considering bankruptcy to do anything different for the time being.

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Knightdale Attorney Erich Fabricius represents clients in bankruptcy, consumer debt litigation, and in small business matters. He is licensed to practice law in North Carolina. His blog posts consider matters related to debt, bankruptcy, litigation, and other legal issues in North Carolina.

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This blog post is made available for educational and informational purposes only and to promote a general understanding of the law, and not to provide specific legal advice. Use of this blog does not create an attorney-client relationship. Reading this post is not a substitute for obtaining legal advice based on the unique facts of your situation from an attorney licensed to practice law in your state. No representation is made regarding the currentness of the information contained in this post. Examples that may be provided in this post are merely for illustrative purposes; the results in your case may be different and no results are guaranteed.