Federal law allows all local governments to seek bankruptcy protection given a filing is permitted under state law.
States impose a range of restrictions and qualifying criteria for municipalities attempting to file for Chapter 9, with only about half having laws specifically authorizing municipalities to file. In Oregon, for example, only irrigation and drainage districts can file for bankruptcy. Montana allows for most municipalities to file for Chapter 9, with the exception of counties.
Other state statutes are without rules governing Chapter 9 filings. Georgia municipalities are explicitly prohibited from seeking bankruptcy protection.
Law firm Chapman and Cutler, LLP, reviewed all state laws, grouping them into categories described below. Click the map to view laws and the number of local governments for each state.
||State specifically authorizes Chapter 9 filings|
||Chapter 9 filing is authorized upon conditions met and further action of state, officials or other entity|
||Municipalities have limited authorization (click for details)|
||No Chapter 9 authorization outlined, laws are unclear or filing otherwise prohibited|
Note: Please zoom out to view Alaska and Hawaii. State policy classifications obtained from "Primer on Municipal Debt Adjustment," Chapman and Cutler LLP. Number of Governments measured in 2012 Census of Governments
GOVERNING Data is your source for state and local government statistics and public records.
Feel free to use any data or visualizations in your own reports with attribution and a link to the source.
Contact: Mike Maciag, firstname.lastname@example.org
Per pupil spending fell for the first time ever in fiscal year 2011, with 21 states reporting declines. See rankings and totals for each state.