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What is Chapter 9 Bankruptcy?
What is Chapter 9 Bankruptcy?
Chapter 9 bankruptcy provides financially distressed municipalities (towns, cities, school districts, or counties) protection while these areas create a feasible plan to repay their creditors. While under protection, municipalities must reorganize their debts so that they can repay their creditors in the near future. During this time, creditors may extend the dates upon which debts are due, reduce the amount of interest and/or principals owed, or municipalities may refinance their debt by obtaining a new loan. Unlike other types of bankruptcy, Chapter 9 bankruptcy does not involve the liquidation of non-exempt assets to repay creditors.
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