Bankruptcy law chapter 9 was established to provide protection to municipalities against its creditors. This law is also known as Municipal Bankruptcy. Municipal bankruptcy is not very common but improper control of budgeting or unexpected financial crisis. When a corporation like municipality faces financial crisis, the proceedings involved are complex and vast. A bankruptcy lawyer can be very helpful in such cases.
Why this law was established and who is eligible for this law?
Chapter 9 gives time to municipality to reorganize its debts. In the meantime, it protects the municipality against the creditors. Municipality bankruptcy does not liquidate its assets to repay its creditors. It usually reorganizes its debts by reducing the interest or principal amount, obtaining a new loan or extending debt maturities. The factors under which a municipality is considered to file a petition are:
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1) The municipality should have been declared an authorized debtor
2) It should be insolvent
3) The municipality should agree to and be capable of adjusting its debts
4) Should have an agreement or deal with its creditors
If you are looking for a bankruptcy lawyer Rock Island County, then you will have a variety of options. They can help you to be eligible to file a petition under chapter 9 and enjoy its benefits.
Who can dismiss the petition and why?
The court can dismiss the filed petition if it finds that the petition doesn't meet the requirements needed. This is decided by the judge after thoroughly going through the notice followed by the hearing. Other reasons why your petition can be dismissed are:
a) Lack of prosecution
b) Delay by the debtors for invalid reasons
c) A plan not proposed within the given time period
d) Any particular reason found that goes against the terms and conditions of the law
Why hire a Bankruptcy Lawyer in Rock Island County?
Bankruptcy lawyers are the professionals who deal with such cases regularly. They have better knowledge of the legal proceedings. Bankruptcy laws are complex and difficult to deal with. These lawyers let you understand your financial state in a much better way.
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