Serving Federal Employees & Contractors Throughout DC, Maryland & Virginia. Free Consultations Available Evenings & Weekends.
Your Federal Job Was Supposed to Be the Safe Bet
For most of your career, it was. Steady income, good benefits, a pension, and the kind of job security the private sector rarely offers. That assumption is gone.
Tens of thousands of federal employees and contractors across DC, Maryland, and Northern Virginia are now facing sudden income disruption. The debt doesn’t take a break because your paycheck did. The mortgage company isn’t waiting. The credit card bills don’t pause.
If you’re trying to figure out what your options are, you’re in the right place.
When the Bills Don’t Stop Just Because the Paycheck Did
A household built around a GS-12 salary, or a government contracting income, carries real obligations. A mortgage in Fairfax or Montgomery County. Car payments. Student loans. Medical bills. Credit cards that started covering the gaps.
Losing the income doesn’t erase those obligations. It just puts you under pressure to solve them.
I’ve spent the last two decades working with federal employees and contractors through exactly this kind of situation. I know what the options look like. I’ll be straight with you about which ones make sense.
What Lee Legal Can Help With
Chapter 7 Bankruptcy. Wipes out credit cards, medical bills, and personal loans. Usually done in three to six months. A genuine fresh start.
Chapter 13 / Save Your Home. Stop foreclosure, catch up on missed mortgage payments, and keep your home. The right tool if you have steady or returning income.
Wage Garnishment Defense. The automatic stay kicks in the moment you file. It stops garnishments immediately. Call me before your next paycheck is touched.
Security Clearance Guidance. Cleared employees need an attorney who understands how the adjudicative guidelines work. I’ve handled this intersection many times.
Government Contractor Cases. Lost a contract or task order? Contractor cases have specific income documentation issues and means test complexity. I know the landscape.
Free Debt Consultation. Not sure bankruptcy is right for you? I’ll go through every option with you at no charge.Lee Legal handles bankruptcy and debt relief for federal employees and contractors throughout Washington DC, Maryland, and Northern Virginia.
Federal Employee Bankruptcy: Your Questions Answered
Here are some answers to the questions federal employees and contractors ask most often. Every situation is unique — contact us for guidance specific to yours.
What’s the difference between Chapter 7 and Chapter 13?
Chapter 7 eliminates most unsecured debt — credit cards, medical bills, personal loans — and wraps up in three to six months. Chapter 13 sets up a three-to-five year repayment plan and is the tool for stopping foreclosure and keeping your home.
If you’ve had a recent income drop, you may now qualify for Chapter 7 even if you didn’t before. I’ll run the numbers with you.
Can a federal employee file for bankruptcy?
Yes. Federal employees have the same right to file for bankruptcy as anyone else. Filing doesn’t automatically affect your employment status or your security clearance, though it may be reviewed during a clearance adjudication. I’ll walk you through what that means for your specific situation.
Will Bankruptcy Hurt My Security Clearance?
This is the first question cleared employees ask. Here’s the answer: unresolved debt is a bigger threat to your security clearance than bankruptcy.
The adjudicative guidelines treat unpaid judgments, wage garnishments, and ignored lawsuits as red flags. Financial hardship from job loss or circumstances outside your control is explicitly treated as a mitigating factor. Taking action is better than letting the pile grow. I’ve handled many cleared employee cases and know how to approach this carefully.
I’m a government contractor who lost my contract. Is my situation different?
Yes, and it matters. Contractors often face a harder landing — no severance, no COBRA equivalent, fewer protections. The bankruptcy process also handles contractors differently, especially around income documentation and the means test.
Whether you’re a 1099 contractor, a W-2 employee of a firm that lost its award, or a small business owner who held the contract, I’ve handled your situation before.
What’s the difference between Chapter 7 and Chapter 13?
Chapter 7 wipes out most unsecured debt — credit cards, medical bills, personal loans — and typically closes in 3 to 6 months. Chapter 13 sets up a 3 to 5 year repayment plan and is the tool for stopping foreclosure and saving your home.
If you’ve had a recent income drop from a layoff or pay cut, you may now qualify for Chapter 7 even if you didn’t before. I’ll run the numbers with you.
Can I stop a wage garnishment or creditor lawsuit after a layoff?
Yes, and fast. The automatic stay goes into effect the moment you file. It halts garnishments, bank levies, collection lawsuits, and most foreclosure proceedings immediately. Call me before it gets worse.
What if I am behind on my mortgage after losing my federal job?
File Chapter 13 before foreclosure moves further. The automatic stay stops the proceeding immediately. A repayment plan then lets you catch up on missed payments over time while staying in your home. Virginia and Maryland foreclosure timelines are fast. Don’t give it more runway.
Are my FERS pension or federal retirement benefits protected in bankruptcy?
Yes. FERS, CSRS, and TSP accounts are protected under federal and state exemptions. You don’t have to touch your retirement to deal with your debt. Most federal employees I work with don’t know this going in.
What debts can bankruptcy eliminate?
Credit cards, medical bills, personal loans, payday loans, utility arrears, deficiency balances on repossessed vehicles, and some older tax debts. Student loans are generally not dischargeable, though hardship exceptions have more room than they used to. Child support and alimony can’t be discharged. I’ll go through every debt you carry so you know exactly where you stand.
Is there a free consultation available?
Yes. You’ll speak directly with me — not a paralegal, not an intake form, not a chatbot. I’ll review your finances, explain your options clearly, and give you a straight answer on the best path forward. No fee, no obligation.
How long does the bankruptcy process take?
Chapter 7: three to six months from filing to discharge. Chapter 13: three to five years, structured through a court-supervised repayment plan. Either way, relief starts the day you file. The automatic stay goes into effect immediately, and that alone changes the pressure you’re under.
Do you serve clients throughout the DC metro area?
Yes. I serve clients in Washington DC, Maryland (Montgomery County, Prince George’s County, and surrounding areas), and Northern Virginia (Fairfax County, Arlington, Alexandria, Loudoun County, Prince William County, and beyond). I file in all three federal bankruptcy courts covering this region and know each court’s local rules well.
Is there a free consultation?
Yes. You’ll talk directly with me — not a paralegal, not an intake form. I’ll go through your situation, explain your options, and give you a straight read on the best path forward. No fee, no obligation.
Evenings and weekends available. Phone, Zoom, or in person in downtown DC.
Who I Work With
Federal employees facing layoffs, RIFs, or forced resignations. Cleared employees and contractors worried about clearance impact. GS, SES, and wage grade employees with FERS or CSRS pensions. Government contractors who lost contracts or task orders. Postal workers, VA employees, DoD civilians, and IC personnel. Federal employees on unpaid administrative leave or LWOP. Small business owners who relied on federal contracts. Federal workers facing foreclosure in Virginia, Maryland, or DC. Spouses and family members of impacted federal workers.
Lee Legal files cases in the US Bankruptcy Courts for the District of Columbia, the District of Maryland, and the Eastern District of Virginia. I know each court’s local rules and how they run.
Your First Step Is a Free Conversation.
You’ll talk directly with me. I’ll listen, explain your options in plain language, and give you an honest read on where you stand.
No pressure. No obligation. No fee.
Call 202-448-5136. Evenings and weekends available.
