Dow Jones Bankruptcy Review reports that after two years of budget cuts and further hits from the federal budget sequestration, officials at one of the nation's busiest bankruptcy courts say they are barely getting by on a bare-bones budget.

The funding for the U.S. Bankruptcy Court for the Southern District of New York has been reduced by 37% over the last two years, to $5.06 million for 2013 from $8.06 million in 2011. The 2013 budget includes the 4% cut the court saw as a result of the across-the-board budget reductions that took effect in March, known as sequestration.

And the court, which has handled some of the biggest, most high-profile Chapter 11 cases in recent years is expecting more budget cuts next year, which could mean further staff cuts.

Cuts to federal spending because of sequestration have been felt throughout the federal court system, causing furloughs across district courts, according to the American Bar Association. Federal district courts in California, Connecticut and Massachusetts are among those that have furloughed staff. The Arizona district court laid off 10 employees in addition to introducing furloughs.

The havoc wreaked by the cuts caused the Judicial Conference of the United States to request $72.9 million in emergency funding for the federal courts earlier this month to "address critical needs resulting from sequestration cuts."

But the Southern District of New York bankruptcy court has felt the strain since 2011 as its budget has been tightened repeatedly.

The court, which has branches in Manhattan, Poughkeepsie and White Plains, has had to lay off 27 employees in the last two years, bringing its staff to 71. There is no one left at all in the records department, said Vito Genna, the clerk of the court.