State Bankruptcy
/ˈsteɪt ˈbæŋkrʌptsi/
Definitions
- (n.) A financial reorganization process whereby a U.S. state seeks relief from debt obligations, though current federal law does not permit states to file for bankruptcy under the federal bankruptcy code.
The concept of state bankruptcy remains controversial because no state has legally filed under the Bankruptcy Code.
Forms
- state bankruptcy
- state bankruptcies
Related terms
See also
Commentary
Though commonly discussed in fiscal crises, state bankruptcy is a theoretical concept because U.S. federal law prohibits states from bankruptcy filings, unlike municipalities.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.