The US Government Shutdown and Its Effect on the Bankruptcy Courts

The ongoing shutdown of many federal government operations remains at the top of the headlines. Of particular importance to our clients is the potential impact this continued shutdown may have on the federal court system, including Bankruptcy Courts and the ability of debtors, creditors and Trustees to transact business through these Courts.

Weltman, Weinberg & Reis Co., LPA is staying abreast of all announcements and Administrative Orders emanating from the federal courts across the country. At this time, all Bankruptcy Courts have indicated that, if the partial shutdown continues, they have the ability to maintain regular operations through January 18, 2019, and perhaps through January 25, 2019. Beyond those dates, the Courts have indicated they will deem certain Court personnel essential and require them to report for work, without pay.  

It is anticipated that, beyond January 25, 2019, the Bankruptcy Courts will be operating with reduced staff and will curtail some services, including regular hearings and dockets. The focus likely will be on processing filings and holding hearings that directly affect the protection of human life and property. While not yet explicitly stated by the Courts, we do anticipate possible delays in hearings being scheduled on motions for relief from stay and plan objections until such time as the federal courts can return to normal staffing and funding levels.

It is expected that both the ECF and PACER systems will remain fully operational throughout the shutdown, regardless of its length. This will allow both debtors and creditors to continue filing pleadings with the Courts, including new case filings, proofs of claim, motions for relief from stay, plan objections and reaffirmation agreements.  

It is also expected that the Bankruptcy case notification system will continue to be operational for the foreseeable future, which will allow all parties to receive notice of new bankruptcy case filings and to be served with relevant pleadings filed within a case.  

For more comprehensive information and insights, watch our Ask a Pro: How to Manage Motions for Relief from Stay and Reaffirmation Agreements - A Guide for Creditors webinar.