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Municipal Bankruptcy Filings: Passing the Buck to Bankruptcy Judges

By Joseph McDaniel, Esq.

Something interesting (Pompeii was interesting, right?) is happening right now.

People are getting older.

You heard it here first.

Now, getting older beats the alternatives, of course.

But as people get older, they look with love at retirement. And they think happily about their pensions, and social security, and their savings.

It appears that savings could be problematical, because of inflation.

Social security could be problematical, because there is no social security fund, and there are a lot of folks in the United States about to retire.

Then there are the pensions, of all sorts.

Traditionally, public pensions and union pensions and other sorts of pensions are off-limits to politicians, because geezers vote. And geezers (like the geezer writing this blogpost) are fond of their unseen, unfelt, unfunded, and as-yet unpaid pensions and retirement funds.

I hear from people smarter than me that the numbers don't work well; that is, there are a lot of geezers, and a smaller number of non-geezers, so if all the geezers want to retire right now, there won't be enough dough to pay the amounts due to them.

So I have a guess that poor, overly-busy U.S. Bankruptcy Judges are going to get a new title: Pension Destroyers.

And they will be lighting rods for the anger that people feel about having their pensions reduced.

Now, a municipal bankruptcy (Chapter 9) is one of the sorts of bankruptcy cases I haven't worked on over the last thirty years (Chapter 7s? Sure. Chapter 13s? Yep! Chapter 11s? Hey, corporate and personal!), and few of my buddies have worked on 'em, because they have historically been fairly rare.

But according to a fair number of smart people, the expectations of us geezers may well be smashed to bits on the rocks of economic reality.

By extension, that means that we'll get to work more years than we expected, if cities file bankruptcy, or states, or Unions, or....well, you get the idea.

Now, I'm an Arizona Bankruptcy Lawyer, and I love my job because I get to help people with overwhelming debt, and I plan to retire to a wooden box, with six good friends carrying me to my retirement home.

But I hope that folks in Arizona will consider their retirement options now, so they'll use a credit card payoff calculator, figure out that they will never pay off their credit card debt in time to start saving for retirement, and get moving toward a bankruptcy in Arizona, as part of their live-well, retire early, and enjoy-life-a-lot plans.

Full post as published by Arizona Bankruptcy Attorney Blog on December 31, 2010 (boomark / email).