There are legal issues however. Currently there is no chapter in the Bankruptcy law to allow a state to declare Bankruptcy. I have therefore sent the following letter to Congressman McNerney’s office urging him to introduce a bill that will add a chapter to the Bankruptcy to allow states to declare Bankruptcy and outline the procedure for a state bankruptcy. I have also sent the same letter to Senators Boxer and Feinstein.
If you agree, I suggest you write or email them as well.
Dear Congressman McNerney:
I am writing to urge you to introduce legislation to amend the US Bankruptcy laws to allow states to declare Bankruptcy. The ongoing budget issues in California are at a point where the survival of California as a state is now in question.
The law should be changed to allow California to declare Bankruptcy. This includes the ability to void state labor contracts, reorganize pension plans, Void state contracts with vendors and if necessary amend the state constitution.
It appears that only through the bankruptcy process can California get its financial house in order.
I urge you to submit this legislation as soon as possible.
