US Bankruptcy Courts and the Government Shutdown

Bankruptcy Attorney Dayton, Oh

Since the unprecedented, longest standing government shutdown, many federal employees and citizens alike have had more questions than answers about what the outcome will be or how long the government shutdown will last. So what about consumers seeking protection from creditors at US Bankruptcy Courts around the country? While up to the third week of January 2019 bankruptcy proceedings have been continuing unabated, this may change soon as US Bankruptcy Courts, and other federal courts are running out of money to pay staff and expenses.

Effects on Bankruptcy Filings

Because the most extended government shutdown in history occurred in 1995-1996 and lasted only 16 days, no one is entirely sure what the result will be on bankruptcy filings and even federal civil and criminal cases, should the current shutdown continue. The US Courts made a recent announcement that it may run out of operating funds as soon as this week and has asked federal courts to try to cut down on expenses that are not absolutely necessary to cases. On its website, the US Bankruptcy Court for the Southern District of Ohio states that it will “determine on a weekly basis the staff necessary to support its mission-critical work to carry out its statutory duties.”

Will the Shutdown Affect My Automatic Stay?

Dayton Bankruptcy Attorneys mentioned this week that individuals are still able to file for bankruptcy at the current moment, and should be able to continue to do so if the shutdown persists. Consumers filing for bankruptcy will also continue to receive an automatic stay which is the temporary prevention of creditors seeking to obtain repayment of a debt.

How will my IRS Debt be Handled?

If you are currently involved in a bankruptcy case where the IRS is named as a creditor, your bankruptcy case may take longer than initially expected. Because the IRS is not getting its federal funding, it has asked the US Bankruptcy Courts to temporary suspend all cases in which it is involved.

Contact your Ohio Bankruptcy Attorney

If you have been adversely affected by the government shutdown, you will still have recourse to your debts through bankruptcy, although it is possible that it could take longer than usual due to the lack of funding. The same could hold true if you are already in the Chapter 7 bankruptcy process. For those in the middle of a Chapter 13 bankruptcy repayment, continue to make your payments to the bankruptcy trustee on time and as agreed. For other questions, contact your Dayton bankruptcy lawyer.

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