As a result, modern Chapter 9 fillings don't work quite like other bankruptcies. When a city goes bankrupt, the judge's primary job is to make sure that it's eligible to file and to approve its plan for paying off the debt. In particular, the judge can't order a city to liquidate its assets to pay off creditors.
Considering this, what happens if government goes bankrupt?
Originally Answered: What will happen to a country if they go bankrupt? Bankruptcy means that you default because you are unable to pay interest on your debt. A government that is unable to borrow money may run into even more financial trouble as they won't be able to spend money on the country.
Beside above, can a government go broke?
A big part of the issue: As the law stands right now, states can't declare bankruptcy. But the controversy points to a broader problem states across the country are facing — their costs have skyrocketed and their revenue has plummeted, and unlike the federal government, they can't run a deficit.
Can the US go broke?
Under the Constitution, bankruptcy is a power entirely reserved to the federal government. An American bankruptcy is overseen in federal court, by a federal judge, according to federal law. That's why federal law can allow U.S. cities to go bankrupt, as many have done over the years.
What is the most broke state in the US?
10 states where residents have the most debt, ranked by DTI
|Rank ||State (including D.C.) ||Debt-to-income ratio |
|1. ||Washington, D.C. ||1.09 |
|2. ||Colorado ||1.05 |
|3. ||California ||1.04 |
|4. ||Arizona ||0.96 |