A prominent bankruptcy attorney believes the number of bankruptcies could increase– and this time for an unlikely place. Attorney Michael Greiner believes that public employees may be forced to file for bankruptcy at a higher rate because of financial pressures they’re experiencing from state and local governments struggling to balance their budgets.

“Traditionally, public employees were not eligible for Chapter 7 Bankruptcy due to the fact that they had good salaries and typically didn’t have to pay much toward their benefits,” Attorney Michael Greiner said. “In the current fiscal crisis, that is changing.”

Many government employees have experienced cuts in salary as well as reduced benefits which puts a bigger burden of health care costs on the employee. Some employees are now paying more towards their own retirement benefits, life insurance and other benefits that were once covered by public dollars.

Among those public employees are have been impacted are teachers. Greiner says some have been forced to pay a certain percentage of their pay back to the government to help meet budgets. In addition to facing cuts, many public employees are working harder and more hours than ever before. “I had a teacher come to me recently who has a very high salary and lives on her own,” said Greiner.

“In the past, she would not have been eligible for Chapter 7. But she hasn’t received a pay raise in a number of years, and almost half her pay goes to deductions. As a result, once the deductions were factored in, she became eligible for Chapter 7 Bankruptcy. She will not be alone.”

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