Federal Bankruptcy

Link From: www.newzzcafe.com Policy makers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers. Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign. Nations do not go broke. Nations do not default. Nations have a blank check to write with no balance. The currency collapses. States do go broke. -Jim Sinclair

MP3 hotfile.com In the first half of the program, monetary historian Andy Gause joined Ian Punnett to discuss the serious ramifications if states start filing for bankruptcy protection. According to Gause, many states have unfunded pension obligations that they are legally required to pay but have no way of meeting. California, for example, owes half a trillion dollars to its public servants. The state may choose to increase the tax burden on its residents or possibly seek to restructure this debt through bankruptcy, he explained. Municipalities such as Vallejo, CA, which recently emerged from bankruptcy, may set a precedent for state-level bankruptcy, Gause suggested. And a real threat of bankruptcy could compel the federal government to step in with a bailout. “I think you’re going to see a bit of an abdication of sovereignty by the states in exchange for bailout-type deals,” he added. Fiscally troubled states may also look to help from large private investors who, flush with low interest loan money from the Federal Reserve, could go in and buy up their public assets (garages, airports, turnpikes, etc), Gause continued. This has already happened in Arizona, where the state sold off its capitol buildings (to an investment group from whom they now rent) in order to pay off debt obligations. For some states, even selling all of their infrastructure projects may not be enough. Massachusetts, for instance, is sinking under the enormous and continuing financial burden of its …

A bit of a rant by attorney David Kelly (Dave) about claims advertised by debt settlement companies. Some of them try to imply that they have secret information that nobody knows but them. Others suggest that their program is part of some sort of government program or stimulus package. Some even want you to believe that their program has been set up by President Obama. Dave’s recommendation is that you should stick with agencies that are non-profit and approved by the Justice Department for pre-bankruptcy counseling. If the agency does not have that approval, run the other way. Lots of times debt settlement counseling is not enough. You might have little choice but to file a Chapter 7 or Chapter 13 Bankruptcy. If you find yourself considering that, feel free to call Dave Kelly at 952-544-6356. He can do a no-cost screening over the phone and give you a pretty good idea of what you qualify for. Kelly Law Office is a Debt Relief Agency, helping people to file for relief under the federal bankruptcy code. This video is advertising. It is for general information purposes only and does not create an attorney-client relationship. Everything stated here is an opinion, not a promise. You should consult the attorney of your choice concerning the details of your case. David J. Kelly Attorney at Law, PA Kelly Law Office 10709 Wayzata Blvd. #205 Minnetonka, MN 55305 952-544-6356 www.mn-bankruptcy.com