Do I Still Have to Pay My Debt During a Government Shutdown?

What about federal student loans?

While most debts are clearly unaffected by government shutdowns, federal student loans represent a unique category that deserves special attention. These loans are issued or guaranteed by the U.S. Department of Education, a federal agency that can be affected by shutdowns. However, even with federal student loans, your obligation to make payments typically continues.

• During past government shutdowns, the Department of Education has maintained that borrowers must continue making their scheduled student loan payments.

• The loan servicers who process these payments are typically private companies operating under contract with the government, and they continue to function during shutdowns.

• Your payment due dates don’t change, and missing payments can still result in delinquency, default, and damage to your credit score.

That said, government shutdowns can affect certain student loan services. You might experience delays in getting questions answered by federal loan servicers, difficulties accessing certain online account features, or delays in processing applications for income-driven repayment plans, deferments, or forbearances. If you’re experiencing financial hardship and need to arrange alternative payment terms, it’s wise to contact your servicer well before a potential shutdown to avoid service disruptions.

• One important note: if you’re seeking Public Service Loan Forgiveness (PSLF) or working through other Department of Education programs, a shutdown might delay processing of your applications or certifications, but it won’t affect your eligibility or the validity of qualifying payments you’ve already made.

Tax debts and IRS operations

If you owe money to the Internal Revenue Service, you might wonder whether a government shutdown affects your obligation to pay these debts or the IRS’s ability to collect them.

• While the IRS is typically affected by government shutdowns—with many employees furloughed and taxpayer services reduced—your obligation to pay tax debts remains unchanged.

• The IRS generally continues to process payments during shutdowns, as revenue collection is considered an essential function. If you’re on a payment plan with the IRS, you should continue making your scheduled payments.

• Automated systems that process payments typically continue operating, though you may have difficulty reaching IRS representatives for questions or assistance.

However, there can be some relief during shutdowns: the IRS typically suspends certain collection activities, including issuing new liens and levies. Audit activities usually cease, and processing of new collection cases may be delayed. But this doesn’t mean your debt goes away or stops accruing interest and penalties. Once the shutdown ends, the IRS resumes normal operations, and any respite from collection activities proves temporary.

If you have a tax payment deadline during a shutdown, you must still meet that deadline. The IRS has historically maintained that shutdowns don’t extend filing or payment deadlines, though this policy could theoretically change during an extended shutdown affecting tax season.

Mortgages and the role of federal backing

Many Americans have mortgages backed or insured by federal agencies like the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), or guaranteed by government-sponsored enterprises like Fannie Mae and Freddie Mac. If you have one of these loans, a government shutdown doesn’t suspend your mortgage payment obligations.

• Your mortgage payment goes to your loan servicer—a private company that manages the loan on behalf of the investor who owns it.

• These servicers continue operating during government shutdowns, and your contractual obligation to make monthly payments remains in force. Missing mortgage payments can still lead to late fees, credit damage, and ultimately foreclosure proceedings.

Where a shutdown might create indirect effects is in new mortgage applications or refinancing. FHA loans require certain verifications and approvals that might be delayed if the Department of Housing and Urban Development is operating with a skeleton crew. VA loans might face similar processing delays. Some conventional loans require IRS tax return transcripts for income verification, and these can be difficult or impossible to obtain during a shutdown. However, these processing issues don’t affect existing mortgages and your obligation to pay them.

Credit cards and consumer debts

For credit card debt, personal loans, auto loans, and other consumer debts owed to private lenders, government shutdowns have virtually no direct impact on your obligations.

• Credit card companies, banks, and other private lenders operate continuously during government shutdowns. Their billing systems continue generating statements, due dates remain unchanged, and late payments will incur the same fees and interest charges as always.

• Collection agencies continue pursuing overdue debts, and creditors can still file lawsuits against delinquent borrowers.

• The credit reporting system also continues operating normally. Equifax, Experian, and TransUnion—the three major credit bureaus—are private companies that maintain credit reports and calculate credit scores independently of government operations.

• Late payments, defaults, and collections will appear on your credit report during a shutdown just as they would at any other time, with the same long-lasting negative effects on your credit score.

These are purely private contractual arrangements, and the creditors expect timely payments regardless of what’s happening in Washington, D.C.

What if you’re a federal employee affected by the shutdown?

While government shutdowns don’t eliminate debt obligations for anyone, they can create genuine financial hardship for federal employees who are furloughed or working without pay. If you find yourself in this situation, you still legally owe your debts, but you have options for managing the temporary income disruption.

Many creditors have hardship programs specifically designed for situations like government shutdowns. During past shutdowns, major banks and credit card companies have offered assistance to affected federal workers, including:

• Waiving late fees and penalties
• Suspending negative credit reporting for missed payments
• Offering temporary forbearance or payment deferrals
• Waiving early withdrawal penalties on CDs for emergency access to funds
• Providing special low-interest or no-interest loans to bridge the gap

The key is to contact your creditors proactively, before you miss payments. Explain your situation, provide documentation of your federal employment if requested, and ask about available assistance programs. Many creditors are more willing to work with borrowers who communicate early rather than those who simply stop paying without explanation.

• For mortgages, contact your servicer immediately to discuss options like forbearance, which temporarily reduces or suspends payments.

• For federal student loans, you might qualify for deferment or forbearance if you can demonstrate financial hardship.

• For utility bills and other essential services, many providers have assistance programs for temporary income disruptions.

It’s also worth noting that during extended shutdowns, some states and localities have offered assistance to affected federal workers, including emergency food assistance, unemployment benefits, and other support services. Credit unions serving federal employees often provide special loan programs during shutdowns.

Legal protections and your rights

It’s crucial to understand that no law or regulation suspends your debt obligations during a government shutdown. However, existing consumer protection laws remain in force.

• The Fair Debt Collection Practices Act continues to limit how collection agencies can contact you and what tactics they can use.

• Bankruptcy laws remain available if you face insurmountable debt problems.

• Consumer protection regulations enforced by agencies like the Consumer Financial Protection Bureau (which may operate with limited staff during a shutdown) continue to apply.

If you’re facing genuine financial hardship that coincides with a government shutdown—whether because you’re a furloughed worker or for other reasons—bankruptcy and other debt relief options remain available. Courts continue operating during shutdowns, so legal remedies for both creditors and debtors remain accessible.

The bottom line

A government shutdown is a serious political and operational challenge that can disrupt services and create hardship for many Americans, particularly federal employees and contractors. However, it does not suspend, eliminate, or modify your personal debt obligations. Your credit card payments, mortgage, auto loans, student loans, and all other debts remain due according to their original terms.

The key to managing debt during a government shutdown—particularly if your income is affected—is proactive communication with creditors, understanding available hardship programs, and maintaining good financial records. While the law provides no automatic debt relief during shutdowns, many creditors offer voluntary assistance to borrowers facing temporary income disruptions from furloughs or delayed pay.

Understanding the distinction between government operations and private contractual obligations is essential. Your debts exist in the private financial system, which operates independently of congressional appropriations. While certain government services may be temporarily unavailable during a shutdown, the legal framework supporting debt obligations, contract enforcement, and credit reporting continues functioning normally.

There’s always JG Wentworth…

Do you have $10,000 or more in unsecured debt? If so, there’s a good chance you’ll qualify for the JG Wentworth Debt Relief Program.* Some of our program perks include: 

• One monthly program payment 
• We negotiate on your behalf 
• Average debt resolution in as little as 48-60 months 
• We only get paid when we settle your debt  

If you think you qualify for our program, give us a call today so we can go over the best options for your specific financial needs. Why go it alone when you can have a dedicated team on your side? 

SOURCES CITED

Hubbard, K., Watson, K. & Yilek, C.. “Senate votes fail again as government shutdown drags on.” CBS News. October 9, 2025.

“America’s Banks are Here to Help.” American Bankers Association. October 6, 2025.