New Civil Relief Act Pauses Evictions, Foreclosures, and Student Loan Payments for Feds During Shutdowns

The Federal Employees Civil Relief Act is essentially a financial emergency brake for federal workers caught in a government shutdown. The core idea is simple: if the government stops paying its employees, those employees shouldn’t immediately lose their housing or face financial ruin. This bill temporarily stops certain legal and administrative actions that could harm the civil rights of federal workers—a group that includes both direct government employees and their contractors—during a funding lapse or a debt ceiling crisis (Sec. 2, Sec. 3).

If a shutdown lasts longer than 24 hours, the protections kick in and last until 30 days after the shutdown ends (the “Covered Period”). Crucially, federal agencies are required to notify employees of these benefits the day they are hired and again on the day any shutdown starts (Sec. 4).

The Pause Button for Bills

This Act gives furloughed or unpaid federal workers the ability to go to court and request a temporary hold on a long list of financial obligations. Think of it as a mandatory time-out from debt collection. This covers rent, mortgage payments, insurance premiums, taxes, fines, and student loans (Sec. 5). For anyone juggling a mortgage or rent, this is huge: it prevents a temporary loss of income from spiraling into a permanent loss of housing.

Keeping the Roof Over Your Head

Section 6 and Section 7 are dedicated to housing security. Landlords cannot evict a federal worker or seize their property (like furniture) during the covered period unless a judge specifically allows it. If a federal worker’s ability to pay rent was hurt by the shutdown, the court must pause the eviction proceedings for at least 30 days, or longer if deemed fair (Sec. 6).

Similarly, lenders cannot foreclose on a federal worker’s home during the shutdown period without prior court approval. If a worker defaults on a loan secured by property during the shutdown, any sale or seizure is invalid unless a court approves it beforehand (Sec. 7). This protection is designed to keep families in their homes when their employer—the federal government—is failing to pay them.

Student Loans and Tax Relief

If you’re a federal worker with student loans, Section 9 offers significant relief. If your loan payment is due during a shutdown and you’re unpaid, you automatically qualify for a deferment. This means you don't have to make principal payments, and, critically, no new interest accrues during this time. Lenders also cannot declare the loan in default or send it to collections during the covered period (Sec. 9).

Section 10 addresses income taxes. If the shutdown significantly impacts your ability to pay federal income taxes, you can notify the IRS and defer those payments for up to 90 days after the shutdown ends—and you won't be charged interest or penalties for that delay. However, this deferral does not apply to Social Security and Medicare taxes.

Your Credit Score is Safe

One of the most important protections is found in Section 12. If a federal employee seeks or receives any temporary relief under this Act—like pausing a mortgage payment or deferring a student loan—that action cannot be used against them later. Creditors cannot deny them credit, change the terms of an existing loan, or deny an insurance policy just because they needed this shutdown protection. This prevents a temporary financial crisis from causing long-term credit damage.

The Trade-Off for Creditors

While this bill is a massive win for federal workers, it shifts the burden onto creditors, landlords, and lenders, forcing them to absorb the temporary financial risk caused by a government shutdown. If a landlord is relying on timely rent to pay their own mortgage, they are now legally required to wait, potentially creating a domino effect. The bill attempts to balance this by allowing courts to award fair compensation to landlords or adjust loan terms, but the immediate financial pressure is placed squarely on private entities.

Finally, the Act has teeth: anyone who knowingly violates these protections—for instance, a lender who forecloses without court approval or a landlord who attempts an illegal eviction—is committing a misdemeanor and could face fines of up to $110,000 for repeat offenses, or up to a year in prison (Sec. 6, Sec. 7, Sec. 13). This provides strong recourse for federal workers who are wronged while the government gets its act together.