Friday, October 31, 2014
13 US cities in bankruptcy yet world's self appointed policeman spends billions of $s on wars far away from home where defeat after defeat is the only outcome
Suicidal ... just like Rome was before its fall.
This list is from early this year. By now, there might be additional cities on that list and many more planning to file for bankruptcy.
Which American municipalities have filed for bankruptcy?
Across the country, from Vallejo, Calif. to Detroit, Mich., some cities that cannot repay their debts have taken the extreme step of declaring municipal bankruptcy.
Cities file for bankruptcy under Chapter 9 of the Bankruptcy Code. Yet before a city can declare Chapter 9 bankruptcy, the city must establish it is eligible to do so according to state law.
Chapter 9 bankruptcy is relatively rare. We’ve listed the cities and towns that have filed for Chapter 9 bankruptcy since 2008 on the map below.
According to bankruptcy attorney Karol Denniston, when a city owes money to its employees, pensioners, and creditors, these debts constitute a contract — similar to a business taking out a loan. If the debts cannot be repaid, a municipality may consider bankruptcy as a last resort to negotiate reduced financial liabilities.
But unlike individuals and corporations, cities are not always allowed to declare bankruptcy.
Bankruptcy is a federal process. In turn, a state must give its cities, towns, counties, and other municipalities — governmental administrative districts like irrigation authorities or hospital districts — the right to petition the federal government to restructure their debts.
Without permission from the state, the federal government granting a bankruptcy petition for a municipality would violate a state’s authority and therefore, the 10th amendment......