Bankruptcy Courts Plagued by Uncertainty in the Wake of Government Shutdown

Although the U.S. Bankruptcy courts have managed to keep their doors open through the initial stages of the Government shutdown, questions remain as to how long they can function with sharp reductions in funding.

Reuters reports that Federal courts will rely on filing fees and other appropriations to pay normal wages to employees, but after that well has run dry, courts will be forced to utilize mandatory furloughs.

Chief judges in each district are tasked with deciding which employees are “essential”, and only those deemed essential will be able to work after the existing funds have been exhausted. However, they will do so without pay and will be compensated retroactively after the shutdown has ceased.

The Wall Street Journal reports that two thirds of those employed by the office of the United States Trustee have been furloughed during the shutdown. These 780 employees are an essential force that preserves the integrity of the institution of bankruptcy around the country.

Federal courts are considered to have enough funds to function normally for 10 days after the Government initially shutdown on October 1, 2013.  What happens after that time remains to be seen.

*Click the name of each publication to be linked to the full article.