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Can Bankruptcy Courts Stay Open During a Government Shut Down?

Published January 22, 2019 by Sasser Law Firm
Can Bankruptcy Courts Stay Open During a Government Shut Down?

The partial federal government shutdown, which began Dec. 22, is now in its fourth week, the longest shutdown of the modern era, due to a budget impasse between Congress and the President over funding for a border wall. It’s understandable that consumers and businesses that have filed bankruptcy petitions or that are considering seeking bankruptcy protection have questions about how the government shutdown affects the bankruptcy courts.

The federal court system, including the U.S. Bankruptcy Court, has continued to operate on a short-term basis using court fees and other limited funds that are not part of the annual appropriations process. Bankruptcy court hearings and meetings of creditors have proceeded according to published notices. It is unlikely that this will change. Courts have been urged to curb non-essential spending by delaying new hires and certain types of travel. It’s safe to say that the longer the partial shutdown lasts, the more government services will be affected. The office hours of the bankruptcy clerk of court may be impacted as well.

If the court system runs out of funds, then the courts will operate under a federal law known as the Antideficiency Act. That provides for certain essential services to continue during a lapse in congressional funding. Each federal court would determine the staff needed to continue critical court operations. While a skeleton staff will handle legal matters deemed essential, such as some criminal matters, other federal court employees, classified as non-essential, may be furloughed as a result of the shutdown.

The partial federal government shut down will not impact a debtor’s ability to file a bankruptcy case or other pleadings through the electronic filing system.

Are State Courts Open During the Shutdown?

North Carolina state courts, which include criminal and civil courts, will continue to operate during the federal government shutdown.

The state courts are funded by appropriations from the North Carolina General Assembly and court fee and are not dependent on Congress for operating funding.

Contact a Bankruptcy Attorney

If you have specific questions about bankruptcy, you should contact an attorney.

The bankruptcy attorneys at Sasser Law Firm are North Carolina board-certified bankruptcy specialists. Our attorneys have helped more than 8,000 individuals and businesses navigate the bankruptcy process and seek a fresh financial start. We have the skills and resources to help you, too. A bankruptcy attorney at Sasser Law is available to answer your questions. Sasser Law Firm offers free consultations, in person or over the phone.

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