Will your city declare bankruptcy? A new law may allow it

[NNN0LHI]

http://www.wthitv.com/dpp/news/local/bankruptcy-bill

Updated: Tuesday, 28 Dec 2010, 6:34 PM EST
Published : Tuesday, 28 Dec 2010, 3:00 PM EST

Kate Greene

INDIANA, (WTHI) - It's not uncommon to see families or companies filing for bankruptcy, but you could see your own city in the mix.

A new bill is being proposed that would allow Indiana cities to fill for bankruptcy.

This new bill backed by Governor Mitch Daniels could be local governments way out of financial trouble.

The bill would allow cities to file bankruptcy and allow the state to takeover.

[xchrom]

1. this isn't going to end well. nt

[no_hypocrisy]

2. Then will the state declare bankruptcy?

And then what?

[me b zola]

4. My best guess is this is a way to break city/government workers contracts

IOW, union bust. The workers will have lower wages and their bennies will disappear.

[ProgressiveProfessor]

5. Indeed

My retirement income is Federal (pension and Social Security). For health care I have Medicare and a supplemental plan. I figure that puts me head and shoulders above my childrens' prospects.

[femrap]

7. I think we have a new 'D' word....

Debt, Deficit and now Default. I imagine TPTB will find a way to put the taxpayers on the hook for this. Maybe we'll all end up paying for fire, police, and library services + taxes.

It's not going to be pretty at all.

I'm going to try and :hide:

[robcon]

3. Whether you 'declare' bankruptcy or not, if you don't pay your bills you're bankrupt.

Illinois is bankrupt.

[Statistical]

15. Nope,

Not paying your bills making you insolvent.

Those bills don't go away and neither do the creditors. Eventually they can seek judgement, and then size assets.

Creditors could force city to sell assets to pay them.

Bankruptcy is an option to eliminate those debts.

Although bankruptcy is used casually there is only one way to be bankrupt and that is to "seek bankruptcy protection from creditors".

[The Backlash Cometh]

6. Allow the state to take over?

Hmmmmmm...

[sixmile]

8. Best thing that could happen in today's economy

I'm certain this view will not be popular, but hard decisions seldom are.

[girl gone mad]

12. I think a lot of these towns..

just don't have any other viable choice.

[sixmile]

14. The scarlet letter of bankruptcy is hyped

It's propagandized by lenders and credit agencies when, in fact, it is a viable business option that, while short term may cause hardship, ultimately eases burdens on borrowers and spreads investment risk to investors - where it should be!

[femrap]

9. Dumfukistan, the former

state of Ohio, just elected an ex-Lehman Bros. partner to be Governor. As soon as he takes office, I am going to call him everyday and find out why he isn't selling Ohio to Canada.

[BeFree]

10. Hey!

Why do you hate America!!

Everyone knows it is as American as apple pie to run up the credit cards and declare bankrapture!

Yes -- bankrapture. A new term for the old ways. Your debt gets raptured away by the bank.

The bank is our lord. What that lord giveth, that lord can taketh away. YeeeHa!!

[JustABozoOnThisBus]

11. So what if D.C. declares bankruptcy?

We merge it with Maryland and wish them a good day?

:hi:

[formercia]

13. I dont see that ending well.

IMHO.