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Bankruptcy is More Difficult for Individuals in Arizona; Will Bankruptcy be Easier for States?

By Joseph McDaniel, Esq.

Articles continue to be written about the proposal that States be permitted to file bankruptcy, and it's been predicted that a bill to permit such filings will be introduced in Congress. 

I have to ask myself, because I'm an easily amused Bankruptcy Attorney in Arizona, will the States have to take pre-filing credit counseling classes? And post-filing classes?

Because it's obvious that budgeting isn't the strong suit of any political entity, States included.

And would a State have to pass The Means Test? How insolvent would a State need to be to file a bankruptcy proceeding?

Could a State that almost passed the Means Test start tithing to the Church of its choice until it slid under the Limbo Bar?

Ask yourself: would you like to be able to vote on a bankruptcy plan proposed by a State?

The more I think about it, the more fun I think it might be to watch a State try to make it through a bankruptcy.

If individuals are subject to an idiotic presumption of abuse, should States be subject to a similar presumption?

Or is that a non-rebuttable presumption for a State that NEEDS to file a bankruptcy?

And does anybody else think it's ironic that bankruptcy for people who need relief from overwhelming debt has been made so much more difficult by the BARF Act, and that the proposal for States will make it easy for the States?

 

Full post as published by Arizona Bankruptcy Attorney Blog on February 05, 2011 (boomark / email).