Stockton, CA to file Chapter 9 Bankruptcy

If you are familiar with bankruptcy, you probably know about Chapter 7 and Chapter 13. If you are more in the know, you would probably know about Chapter 11 and possibly Chapter 12. But get ready to start hearing about Chapter 9.

First off, the different bankruptcy chapters actually refer to chapters in the bankruptcy code. So if you go to the bankruptcy code and look, there is an actual Chapter 7.

Next, only a municipality can file a Chapter 9 bankruptcy. The most well-known one was probably the bankruptcy filing of Orange County, CA in 1994. But with the falling property tax collections resulting from the mortgage meltdown of 2007- present, Chapter 9 filings may become more common. In the news recently, Stockton, CA voted to file bankruptcy.

So if you find yourself having to decide to file bankruptcy, you’re not alone.

No comments yet.

Leave a Reply

You must be logged in to post a comment.