The recent financial collapse of three cities in California has brought much-needed attention to the increase in Chapter 9 bankruptcy filings in the United States, the majority of which have not taken place in California alone. Just five states account for more than half of all types of Chapter 9 filings in U.S. bankruptcy courts though, and these states include Nebraska, California, Texas, Alabama and Oklahoma. Unfortunately, as a result of the economic downturn, many municipalities in Oklahoma and across the United States are finding themselves faced with bankruptcy. If you are a consumer or business struggling under significant debt and are considering filing for bankruptcy in Oklahoma, contact our experienced bankruptcy attorneys at Oklahoma Legal Center as soon as possible.
U.S. Municipalities File Chapter 9 Bankruptcy
Chapter 9 bankruptcy is available only to municipalities, and is a form of reorganization, not liquidation. Chapter 9 bankruptcy, used by local governments and entities they create, differs quite a bit from Chapter 11, a type of bankruptcy available to private companies and nonprofit groups. Since 1981, more than 20,000 companies have sought protection under Chapter 11 of the United States bankruptcy code. In comparison, several hundred municipal entities have filed Chapter 9 bankruptcy since 1980, most of which have been hospitals, school districts, utilities and others, as opposed to entire cities like Stockton, Calif. and San Bernardino, Calif. “Chapter 9 is an effective tool that can be used to protect taxpayers and treat creditors fairly,” said Brian C. Doyle, a land-use attorney in Nebraska, Omaha. Unfortunately, with the recent Chapter 9 bankruptcy filings in California, people across the country are waiting to see if these are isolated instances or the beginning of a new trend.
Contact an OK Bankruptcy Attorney Today
Chapter 9 municipal bankruptcies are extremely rare, and large ones, like in Stockton, California, are virtually nonexistent. In light of the financial difficulties California cities are facing these days though, experts warn it may be a signal for other states to get ready to intervene in the affairs of their troubled cities. As municipalities across the United States file Chapter 9 bankruptcy in an attempt to restructure their debts, consumers in Oklahoma are also facing financial difficulties that may call for a Chapter 7, Chapter 11 or Chapter 13 bankruptcy filing. If you think filing for bankruptcy in Oklahoma might be a viable option for you, contact our experienced bankruptcy attorneys at Oklahoma Legal Center today. With the help of our knowledgeable bankruptcy lawyers, consumers and businesses alike can assess their financial situation and determine what kind of action best suits their needs.