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Point-Counterpoint on States and Bankruptcy

By Joseph McDaniel, Esq.

Some smart writers think it's a bad idea to give states the power to file bankruptcy, and seem to make the argument that it would be constitutionally or legally difficult or complicated.

That doesn't seem to be the case to me; complicated legal messes are what keep the Bankruptcy Court humming like a Mazda Rotary Engine.

Putting it another way, the legal complications in the "rotting strawberries" situation is dealt with by a Bankruptcy Judge in a very simple way; he uses his Godlike Bankruptcy Judge Powers to order an immediate sale, and everything gets sorted out thereafter.

The reason a Bankruptcy Judge HAS those powers is to do what needs to be done, and quickly. 

Bankruptcy Judges have a wealth of experience dealing with angry creditors, debtors, and equity holders.

And after folks in every category have realized that a Bankruptcy Judge is perfectly willing to make rulings that count, and he'll do it at any given hearing (or she will), the number of very reasonable people multiplies like rabbits in Australia.

Full post as published by Arizona Bankruptcy Attorney Blog on January 25, 2011 (boomark / email).