California Cities In Bankruptcy

From California Cities and Municipalities In Or Near Bankruptcy

Cities can file for bankruptcy if they are insolvent which means they are unable to pay debts that are due. When in bankruptcy, a city doesn't have to pay its creditors while it negotiates a plan for dealing with its debts. Municipal bankruptcies are extremely rare because cities have the power to tax. Since they can tax their citizens, cities have a hard time convincing a bankruptcy court that they truly cannot pay their debts.

List of California cities that have filed for Bankruptcy in 2012 :

1. June 18, 2012: Stockton, with 300,000 residents
2. July 2, 2012: Mammoth Lakes with 7,700 permanent residents
3. July 10, 2012: San Bernardino with 209,000 residents

The dominoes are starting to topple.