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Delaware law provides financial relief to federal employees impacted by shutdown

State Issues State Legislation Shutdown Relief Mortgages Foreclosure

State Issues

On January 23, the Delaware Governor signed HB 2, effective immediately, to provide federal workers residing in the state a “temporary suspension of judicial and administrative proceedings in Delaware” if the worker’s ability to pay certain obligations are affected by a government shutdown. Under the act, furloughed federal workers may apply to a court or administrative agency “for a temporary stay, postponement, or suspension regarding any payment of rent, mortgage, tax, fine, penalty, insurance premium, judgment, or other civil obligation or liability.” The length of the temporary stay may be for the covered period (defined as the period that begins on the date the shutdown started and ends on the date 30 days after the date on which the shutdown ended) and 90 days thereafter, or for any part of that period. The court may also set installment payment terms and amounts “as is considered reasonable.”

Among other things, HB 2 also (i) prohibits the lapse, termination or forfeiture of the health, life, disability, or motor vehicle insurance policy of a federal worker without a court order; (ii) places limits on the maximum interest rate that can be imposed on debts incurred before the shutdown to six percent, and states that the interest rate limit applies to debts related to “a mortgage, trust deed, or other security in the nature of a mortgage” during the covered period and 90 days thereafter, but only applies during the covered period for all other obligations or liabilities; and (iii) provides the Attorney General with the power to enforce the act’s provisions, and allows courts to impose civil penalties of up to $10,000 per violation, with wilful violations to be assessed daily.

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