Bankruptcy Indiana

When a city or county files bankruptcy, it’s not the same as when a restaurant owner files small business bankruptcy in Indiana, or when an individual in our state files personal bankruptcy in Indiana.  No, it’s not the same, but, in many ways, it’s similar.

In all of the twenty five years I’ve been a debt consolidation lawyer offering Indiana bankruptcy help, there’s never been a provision for a city or town to file Chapter 9 bankruptcy in our state. There are two reasons I began, back in 2008, to write about municipal bankruptcy in these Bankruptcy in Indiana articles.  One of those reasons is that I wish municipal bankruptcy were allowed here and I would like to be involved in that type of work if ever that does come to pass.

A more important reason, though, is the similarities.  There are just enough similarities so that readers and clients seeking Indiana bankruptcy information can better understand the whole bankruptcy process and the principles behind it, just from following the news story.

Take the recent news about Vallejo, California, which has just emerged from the bankruptcy that I first mentioned three years ago.  Is everything just hunky-dory with Vallejo?  Of course not.  Bankruptcy – in Indiana, in California, or anywhere – is no miracle cure.  But are things better for the city?  Definitely.  “Declaring bankruptcy gave the city protection from creditors and allowed it to renegotiate its employee contracts,” explains the San Francisco Chronicle.

As one of the Columbus bankruptcy lawyers who works in the Zuckerberg bankruptcy law offices puts it – municipal bankruptcy forced Vallejo to create a more realistic budget.  Five fire stations needed to be closed and funding had to be reduced for some senior centers and library branches.  Some public works projects needed to be postponed.  Is that pleasant to do? Of course not, but, just as in individual bankruptcy in Indiana, Vallejo’s bankruptcy bought time for it to work out a budget that is more sustainable.

At the Mark Zuckerberg law practice, I’ve developed a saying: “To fix your credit, start with a bankruptcy.” Nothing ever gets better by ignoring the problems.  Bankruptcy in Indiana, just as it’s proving to be in California, marks a beginning – a fresh start, and a fresh budget.