As many of you know, the United States government shutdown that took effect December 22, 2018, continues. The Federal Courts have issued a statement indicating that they will remain open through January 11, 2019, based on existing non-appropriation funds. However, it is possible that, should the shutdown continue, courts may change aspects of their services once those funds are exhausted.
What this may mean for you in the context of default services is that you may have customers who are government employees that may have difficulty meeting their mortgage obligations as a result of furlough or delay in getting their paychecks. It is possible that government contractors may not get paid at all. In addition, customers currently in default who have pending loan modification applications in which an agency of the federal government is involved, may experience delays (or denials) of their loan modifications due to the government shutdown. In addition, you may have difficulty obtaining information regarding federal tax liens on existing collateral.
Bankruptcy cases should continue (for the most part), although debtors on the brink of foreclosure may experience difficulty in verifying any pro se bankruptcy filings. We would be happy to assist you with any questions you may have about how a continued shutdown may impact your ability to provide necessary services to your customers or any other matters relating to your business.
Specific Coverage Areas:
Michigan: The U.S. District Court for the Eastern District of Michigan (which includes the Bankruptcy Court) has not issued any statement regarding any impact of the shutdown. Until or unless further notice is provided, any cases pending in the Eastern District will proceed as scheduled.
However, we have learned that the Detroit Field Office of the U.S. Trustee (affecting bankruptcy cases) is closed with a skeletal staff available for limited activities. This may cause delays in cases in which the Federal Government is a party or has an interest.
The U.S. District Court for the Western District of Michigan has stayed Social Security cases for 60 days, but the Bankruptcy Court is proceeding as usual until further notice.
Illinois: The U.S. District Court for the Northern District of Illinois has issued General Order 18-0028 holding in abeyance civil matters involving the United States as a party. Any civil litigation in which the United States of America, its agencies, its officers or employees (individual or official capacity, including current and former employees), as well as any other party represented by the Department of Justice or the U.S. Attorney’s office, is suspended for 14 days from December 26, 2018. While none of the other Illinois Districts have issued a formal notice, they may follow the same terms outlined in this General Order.
About Potestivo & Associates, P.C.:
For over twenty-nine years, Potestivo & Associates, P.C., has been providing superior legal solutions to the real estate finance and credit industry. Headquartered in downtown Rochester, Michigan, the firm also maintains full-service operations in Chicago, Illinois, with a satellite office providing select services in Grand Rapids, Michigan.
Potestivo & Associates, P.C.’s attorneys are accomplished, highly experienced, legal practitioners who vigorously represent and advocate for our clients. The firm has composed a strong legal team covering all areas of practice. Our talented team of professionals provides our clients with confidence that their matters are guarded and handled with the utmost importance and legal accuracy.
If you would like to further discuss the information indicated in this news blast, please contact Cheryl Cook, Supervising Bankruptcy Attorney, at firstname.lastname@example.org or at (248) 853-4400, ext. 1239.