On July 28, 2015, U.S. Treasury Secretary Jacob Lew said that creating a path that would allow Puerto Rico to file for bankruptcy as soon as possible would help the U.S. territory recover from its economic crisis.

Lew said that a federal bailout is not being planned for Puerto Rico, despite the prospect of its government defaulting on several upcoming payments and its $72 billion in public debt.

In a letter addressed to Sen. Orrin Hatch, R-Utah, Lew said that Puerto Rico's fiscal situation is urgent, and he believes that it requires immediate attention from Congress. Without collective action, he said, he is deeply concerned about a lengthy and disorderly restructuring process that would cause long-term damage to the well-being to the people of Puerto Rico.

Lew was responding to a request from Hatch, the chairman of the Senate Finance Committee. Hatch wanted to know what action if any, the Obama administration was taking to address Puerto Rico's financial crisis.

Puerto Rico is entering its ninth consecutive year in a recession, and the Gov. Alejandro Garcia Padilla's administration is pushing for the right to file for Chapter 9. House Republicans have voiced their concerns that allowing Puerto Rico to file for bankruptcy wouldn't solve its financial problems.

Pedro Pierluisi, Puerto Rico's representative in Congress praised Lew's letter, and said that he would do everything in his power, working with his allies on both sides to move the legislation forward in Congress on an expeditious timeline.

Meanwhile, U.S. investors are waiting to see if Puerto Rico defaults on a few of its multi-million dollar payments that are due by month's end.

If you are contemplating filing for bankruptcy, contact a bankruptcy attorney near you!