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Government shutdown's effect on Arkansas bankruptcy court

To gauge things by the website for the U.S. Bankruptcy Court in Arkansas it seems to be pretty much operations as usual, despite the ongoing shutdown of the federal government. A statement on the site says the judiciary is open for business, though the situation will be reassessed if the shutdown continues beyond Oct. 15.

Although the doors to the district courts are open, and officials say that all deadlines for most, if not all, current cases are still in effect, it is possible that some delays may be felt by those seeking debt relief. That's because when a person petitions for protection under Chapter 7 or Chapter 13, a trustee is assigned. But staffing for that program has been cut under the shutdown.

Trustees are known as the watchdogs of the process. They are tasked with making sure that the bankruptcy procedures are properly followed so that creditors, debtors and all other stakeholders can be confident the process is being executed appropriately.

So, while hearings continue and motions are approved, there are concerns in some quarters that some bankruptcy proceedings are, or will be dragged down by the shutdown.

In New York City, the trustee over one particular Chapter 11 case is on duty and working, but she doesn't have the support staff she normally does. That prompted the judge in the case to express concern recently that some issues might fall through the cracks ahead of a hearing that was scheduled for this week.

In the face of such uncertainty, it would be understandable if some considering the option of filing for bankruptcy to obtain debt relief were to be concerned about their options. Contacting an attorney is perhaps the best way to get those concerns addressed.

Source: WSJ.com, "Government Shutdown Hits Bankruptcy Watchdogs," Joseph Checkler and Stephanie Gleason, Oct. 1, 2013

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