Municipal Bankruptcies: Potential Danger

Did you know that the concept of a municipal bankruptcy was drafted during the Great Depression? In fact the first draft was prepared and presented by the Congress in 1934, where it proposed that corporations and municipal organizations could file for bankruptcy and claim for insolvency in case it has a huge debt pile on itself. The final bill was passed under the Municipal Bankruptcy Act in 1937. It came into force after many amendments and alterations since its initial draft in 1934. The act was incorporated as the economy and the federal council did not have any provisions for municipal debts. During the first few occurrences of municipal debts, the government did not...