Jefferson County in the State of Alabama filed for bankruptcy nearly two years ago. Generally, when a municipality files bankruptcy, it needs to come up with a court-approved plan to reduce the debt it owes. Alabama is not satisfied with its current plan, and it is thinking about ignoring it if its creditors or debtors do not reach an agreement to accept less than they are owed. If these creditors do not accept the plan proposed, then this might prolong coming up with an answer to the debt problem as reported by Reuters in an October 17, 2013 news article.
Initially, the creditors agreed to the current plan, but the county now wants them to approve a new plan, which would then need to be approved by the court. Part of the plan includes income totaling about $2 billion from a â€œsewer system.â€ Moreover, if Jefferson County takes the plan off the table, then a new plan would need to drafted and finalized
The county is giving these creditors or lenders a little over two weeks for the plan to be approved. They feel that the creditors need to agree to the plan, as the interest rates have currently increased since the initial plan, and they are unable to keep up the current interest rates. The county wants to preserve the old interest rates. In addition, the county is going to â€œfile a notice of terminationâ€ if the creditors cannot work out some sort of agreement. So far, there is a court date for November 12.
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