Chapter 9 bankruptcy, which is bankruptcy for municipalities such as cities, counties and towns, is a very rare thing, but one Alabama county may be facing a Chapter 9 in the very near future.
Jefferson County, a county in northern Alabama, is Alabama’s most highly populated county with its county seat in the large city of Birmingham. The county’s size offers it no comfort, however; according to Reuters, county commissioner Sandra Little Brown has predicted that the county has an 80 percent chance of filing Chapter 9. A staggering $3.2 billion sewer bond debt is leaving the county with few options, and pending litigation over the high debts has placed the county in a precarious position.
Other commissioners, as well as John Young, the county sewer system’s financial manager, believe that Chapter 9 will not solve the county’s problems. Young has said that he would still have to raise residents’ sewer rates, even if the county files bankruptcy.