Jump to Navigation

Bankruptcy threatens federal workers

As the government shutdown has continued to affect workers throughout the Washington, D.C., region, a growing number of employees are wondering about their financial futures because of furloughs. Even though the federal government has agreed to compensate employees for their time spent away from work, civilian contractors and other associated workers may face permanent financial woes because of the government shutdown. Experts in the area acknowledge that a loss of just a few days of work could cause personal bankruptcy among those who live paycheck-to-paycheck. Even a relatively minor financial loss can lead to serious money problems for the average American.

One government worker typifies these financial concerns. The man, a federal defense worker, was afraid that his family would be plunged into bankruptcy because of the pay he would miss during a furlough. The man had been forced to use credit cards to pay for family expenses - he has four children - during the sequester earlier in the year. A moderate government shutdown would likely deplete the man's meager savings. The 43-year-old information technology worker is employed at Aberdeen Proving Ground near Baltimore, according to news reports.

Even worse, people like this government contractor may be dealing with other financial difficulties that compound the effects of the shutdown. This man had a heart attack in 2012, and he has been struggling to pay for medical bills associated with emergency surgery in April.

Financial experts say that the man's situation is not isolated, as some 800,000 federal workers are facing payment delays thanks to the cessation of government activities. These government workers are still smarting from the fact that their pay has not been raised since 2010, with officials refusing to provide even modest cost-of-living increases. In addition, federal workers are facing a significant hike in their health insurance costs, thanks to a variety of factors.

Unexpected financial hits can send many families plummeting over a financial cliff into bankruptcy. Despite the undeserved stigma, bankruptcy may be able to get these families back on their feet by allowing for the discharge of certain debts. Attorneys and financial planners can help these families learn about their rights and responsibilities in bankruptcy court.

Source: money.cnn.com, "Federal worker fearing bankruptcy is spared furlough, for now" Jennifer Liberto, Oct. 01, 2013

No Comments

Leave a comment
Comment Information
Start Right Now

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close
Visit Our Bankruptcy Law Website Subscribe to This Blog's Feed
Office Locations

1115 Massachusetts Ave NW,
Washington, DC 20005
Phone: 202-559-1428

10512 Pohick Court,
Fairfax Station, VA 22039
Phone: 703-550-7030

6926 Seven Locks Road,
Cabin John, MD 20818
Phone: 301-890-4500

Toll-Free: 877-441-4076
Fax: 202-638-5858

Twitter link