The North Carolina Bankruptcy Information Blog

Bankruptcy is not just for people and businesses. Town, cities and other municipalities can file for court protection from creditors as well.

Historically, city government bankruptcies are rare. However, in one of the worst economic situations in a generation, it has become more common. Almost two years ago, as the recession was really starting to collect steam, the city of Vallejo, CA filed for bankruptcy. The Bay area suburb of San Francisco cited that rapidly diminishing tax revenue and the housing crisis was too much for it to handle. Cities rely on the housing market just like the business world. As values fall and the number of people moving away outpaces the number of those moving in, things become challenging in a hurry.…

Will California become the first US state ever to default on its bonds in 2010? Last year, Governor Arnold Schwarzenegger spent most of the year haggling with the state legislature to try to come up with a balanced budget. In May, they warned they might go bankrupt if federal government help was not forthcoming – the Obama administration declined to help them out and they went back to the drawing board. Last summer, they issued IOUs to some vendors in lieu of checks. As of December 1, the state had almost 84 billion dollars in long term budget debt.

Just last Friday, Schwarzenegger revealed a new state budget that includes an additional 6.9 billion dollars of federal assistance – assistance the federal government has not yet agreed to give.…

The biggest bankruptcy since Orange County went through it back in 1994 may be coming to an end soon as the City of Vallejo looks to take steps necessary to move out of bankruptcy soon.

City officials for Vallejo filed for chapter 9 bankruptcy in May of 2008. The city had tried to avoid doing so by convincing the local labor unions to accept some salary concessions as the recession really began to take hold. However, since they refused to do so the city was forced to file for bankruptcy as the recession reduced local government tax revenue.

Another town, Desert Hot Springs, was forced to file for bankruptcy when it was hit with a legal verdict it could not cover.…

The team here at the Law Offices of John T. Orcutt is certainly qualified to help you put things in perspective and as smoothly as possible, help you through the tough financial times. Nevertheless, the impact of bankruptcy can be quite emotional, regardless of how professionally it is handled. Thus, we hope it helps you to read a little about some of the more interesting stories happening in the world of bankruptcy today. Here’s a brief recap:

• From Wall Street to Main Street


Not far from Louisville, KY in southern Indiana, the town of Georgetown has decided to file bankruptcy, sparking a debate in the state capital about a municipality’s ability to seek legal protection from debt.…