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Simple English definitions for legal terms

Chapter 9 bankruptcy

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A quick definition of Chapter 9 bankruptcy:

Chapter 9 bankruptcy is a legal way for cities, counties, school districts, and other public bodies to fix their money problems. It lets them make a plan to pay back their debts and keep providing important services to their residents. Only public bodies can use Chapter 9, and they have to meet certain requirements to be eligible. Once they qualify, they have more power than a company in bankruptcy. They can make their own plan to pay back their debts, and creditors can't interfere. The court can't tell them how to run their government or use their money.

A more thorough explanation:

Chapter 9 bankruptcy is a legal remedy for insolvent municipalities to address their fiscal shortcomings through a reorganization plan. This provision allows municipalities to adjust their debts through an adjustment plan to "foster the continuance of municipalities rather than their dissolution."

Only municipalities may file bankruptcy under chapter 9, and no other chapter is available to municipalities. The definition of "municipalities" is relatively broad enough to include cities, counties, townships, school districts, and public improvement districts.

Chapter 9 is modeled after chapter 11, which protects a municipality from creditors, much like a commercial debtor receives protection in a chapter 11 case. In both proceedings, debtors enjoy an automatic stay. This provision protects debtors from creditors bringing any action against the municipality and grants debtors a "breathing spell" for negotiations on debt readjustment.

Chapter 9 differs from chapter 11 in several important respects. Chapter 9 requires municipalities to qualify for chapter 9 protections through eligibility requirements that go beyond those prescribed in chapters 11 and 7. A debtor under chapter 9 must meet five conditions to be eligible.

Once these threshold prerequisites are met, and the filing is approved, a municipality has more power than a corporate debtor in a chapter 11 case. This power is derivative of federalism concerns embodied in the Tenth Amendment, which forbids the federal government from interfering with the sovereign powers of the states, including the states' powers over their localities.

For example, under chapter 9, a municipality has exclusive rights to submit debt readjustment plans for confirmation; the exclusivity period is not limited in time, as in chapter 11. Creditors are barred from submitting plans of their own, even if there is a prolonged delay caused by the municipality.

Moreover, a trustee is generally not permitted to be appointed for the locality. The municipality continues its operations as a going concern with the same leadership, even if the leadership may impair the creditors' interests. The operations of the municipality are left to the local leaders' complete discretion.

Overall, chapter 9 bankruptcy provides a legal remedy for insolvent municipalities to address their fiscal shortcomings through a reorganization plan, allowing them to adjust their debts and continue providing essential services to their residents.

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babycat
9:56
it’s illegal to make you work on a snow day
BulbasaurNoLikeCardio
9:57
Free feet pics sounds like you saved some money
snow
9:59
wish it was snowing in texas rn
Dkk
9:59
Man, hate this conversation cus it just reminds me of the gay guy that used to always ask me for them.
BulbasaurNoLikeCardio
9:59
That cold snap that hit texas is heaven though, opening windows in the house and using the fireplace
snow
10:00
it really is bulb. it was hot as hell for the longest time
BulbasaurNoLikeCardio
10:00
@Dkk: You could of made so much money
that sounds heavenly
babycat
10:00
Aw Dkk has trauma from the gay guy who wanted to fuck his arches
snow
10:00
lmaooooo
BulbasaurNoLikeCardio
10:00
@snow: winter is tattoo season and since that cold snap hit I got one done and have three sessions scheduled lol I love the cold
snow
10:00
whys that?? you're lowkey inspiring me now
snow
10:01
ive been wanting a thigh tat for so long
snow
10:01
or maybe something on my knee, but i heard thats hella painful
Dkk
10:01
I wouldn't say trauma, the trauma would probably come from seeing my friends head get crushed by an LTV and feeling the bag of glass that was his skull in my hands. Or knowing a kid I mentored shot himself with a bullet he used to keep around his neck that I allowed him to have illegally.
Dkk
10:01
Feet shit though, just annoying.
dkk that is heavy stuff
snow
10:01
jesus dk
BulbasaurNoLikeCardio
10:01
Winter is tattoo season because you are less likely to be in the sun exposing the healng tattoos, you dont go swimming or tanning in winter either so you don't miss out on the fun stuff of summer
Guys
Do u think I will hear from au today
snow
10:02
homely i hope we do!
Yes is the only correct answer ty
Dkk
10:02
Lmfao, it's just part of life in the military. Couple years ago a guy I knew got crushed by a tree. Is what it is.
snow
10:02
@BulbasaurNoLikeCardio: thats smart. i dont know anything about tattoo care lol
babycat
10:02
Also piercings are better to get in the winter
snow
10:02
dk i feel like you would do great in criminal defense
soap
10:02
you good Dk?
snow
10:03
i got my nose pierced last thanksgiving and it got infected @babycat
Dkk
10:03
Probably could just shock the jury into sideing with me lol
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