Federal Government Shutdown and Bankruptcy Courts

If congressional budget negotiations ever lead to a government shutdown, the U.S. bankruptcy courts may keep the federal judiciary running.

According to Eric Morath, a writer for the the Daily Bankruptcy Review, federal court officials are preparing contingency plans that fund the courts by means of collected fees rather than appropriations. Morath notes that Bankruptcy courts collect substantial fees from filers and could be an important source of funding.

Judge Randall L. Dunn, a Bankruptcy Judge in Portland, Oregon and president of the National Conference of Bankruptcy Judges had noted that during the government shutdowns during the mid-1990s, bankruptcy fees funded the entire federal court system for roughly two weeks.

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