West Palm Beach Bankruptcy Lawyer

Chapter 9 Bankruptcy

Sometimes, even municipalities can suffer from hard economic times and accrue large debts that they cannot handle. When this happens, the political subdivisions can turn to Chapter 9 bankruptcy as a viable option to help them reorganize and restart their financial standings. Bankruptcy attorneys Eric N. Klein & Associates, P.A. are here to help your municipality file for Chapter 9 bankruptcy if you find yourselves in a difficult fiscal position.

How does Chapter 9 bankruptcy work?

When a municipality – defined as any sort of political subdivision, including cities, counties, townships, or even school districts – finds itself in a financially troubled situation, they have the option of claiming Chapter 9 bankruptcy. If the municipality opts to file for Chapter 9 bankruptcy, then it will begin the process of renegotiating with creditors. These discussions typically result in the reduction of the district’s outstanding debts or in the lowering of the repayment plan’s interest rate.

Under this type of plan, the liquidation of the municipality’s assets is typically a practice that is never implemented. The district is generally decently well-protected by the Tenth Amendment in that the federal government is prohibited from taking on any power that is not defined in the Constitution (e.g. this type of forced liquidation). Since bankruptcy courts are part of the federal judicial system, they cannot force the municipality to liquidate its assets.

Contact Us

If you are involved with a municipality that has recently found itself in a difficult economic position, then Chapter 9 bankruptcy could be a good solution for you. Please contact the West Palm Beach bankruptcy lawyer of Eric N. Klein & Associates, P.A. today at 561-353-2800 to schedule an evaluation appointment.