Debate begins as San Diego mulls Chapter 9 option
Sunday, January 31st, 2010Bankruptcy 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.…