Can A State Declare Bankruptcy?
The answer to the question: Can a State Declare Bankruptcy? is No. As of today, January 22, 2011, the answer is No. That is the good news. However, I'm sure many people who work in the budget offices in California and Illinois wish they could. A quick fix would be nice for these and other States plagued by debt.
Unfortunately, like many individuals learn, bankruptcy is not a quick fix to debt problems. The only exception to that statement is General Motors, all my clients should be so lucky. Anyhow, if a State declares bankruptcy, many people could be hurt. The list is endless. Think about throwing a pebble into a calm pond. When the pebble hits a ripple extends in a circle and disrupts all the water in its wake. The same thing would happen if a State declared Bankruptcy.
Rumor has it that several states are seeking out the opinions of bankruptcy attorneys as to how to cope with their debt problems.
Maybe we will see a bailout. Maybe the Federal Government will cancel any debts owed by the States. I don't know what will happen. The States should be required to balance their budgets. They should be more fiscally responsible. Let's face it, tightening the belt and saying No, we cannot afford it is a tough thing to do. But, for those of us less than fortunate to have an unlimited budget, we must do it. Now it is time for us to pay the price for our bad decisions in the past.
This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog, www.faircreditreportingactblog.com and www.fairdebtcollectionpracticesactblog.com, and the firm's mortgage modification blog.
