A Reglement-Legal attorney gives three facts you should know about Chapter 9 bankruptcy.
1. Only municipalities can file for ch.9 bankruptcy under federal government laws. Cities and towns who are in trouble with debt load are seeking protection from their creditors. It is nearly impossible for a creditor to collect on a debt or even force liquidation of assets to pay off the debt under state laws. Municipalities in trouble do have the last resort option of filing ch.9 bankruptcy.
2. Municipalities impose taxes, offer services, sell bonds, invest, and have several other options to make money in order to operate. Sometimes due to lack of proper budgeting, a natural disaster, tragedy, or severe recession can send a municipalities debt load spinning out of control. With the towns or cities owing way more than they can pay, they seek out other options to control the paying off debts.
3. Filing ch.9 bankruptcy allows them the time and protection they need to create a new plan for paying off their debt loads. In this plan they offer debt loan reductions, interest rates reductions, get the terms of the loans extended, or refinance as way of repayment to their creditors. Once approved by a judge, the municipality follows this plan for repayment of debts.
We can answer all of your questions regarding filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment,asset protection, discharging a debt, etc.