Local Governments and Chapter 9
A San Francisco bankruptcy attorney speaks to Local Governments and Chapter 9
The Bankruptcy Code provides relief for municipalities and local governments in addition to individuals and businesses. Municipality reorganization is found in chapter 9 of the bankruptcy code and is only available to local governments, municipalities, public agencies, and political subdivisions.
Local governments and chapter 9 filings are much less common that individual and business filings, however chapter 9 filings are not unheard of. Chapter 9 reorganization differs from individual filings in the sense that the local governments have much more control over the reorganization plan, thanks in part to the 10th Amendment of the U.S. Constitution – which protects states rights from federal government interference.
One of the biggest differences between chapter 9 bankruptcies and other chapters of the bankruptcy code is the fact that there can be no involuntary proceeding brought under chapter 9. Another big difference is the ability of the political entity to raise taxes and implement other revenue generating programs without court approval. Municipalities can also invoke broad power when dealing with public employees operating under a collective bargaining agreement.
The bankruptcy court does possess some power, however, and can dismiss petitions that were not filed in good faith or petitions which appear to be abusive or filed simply to take advantage of the bankruptcy powers. The most well known recent example of a chapter 9 bankruptcy filing was in 2009 when the City of Vallejo, CA filed in order to alleviate budget problems and reorganize its finances.
If you have questions regarding bankruptcy in San Francisco or bankruptcy in the greater Bay Area please contact our San Francisco Bankruptcy Attorneys at (415) 946-8882 for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced San Francisco Bankruptcy Attorneys. After you have spoken with one of our Bay Area bankruptcy attorneys, we can schedule you for a free face to face appointment in an office location nearest you. Our team of Bankruptcy Lawyers, Bankruptcy Customer Care Specialists and Bankuptcy staff supporting San Francisco and Bay Area consumers in debt can assist you with all aspects of your bankruptcy or bankruptcy litigation case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, San Francisco Bay Area!
