United States Bankruptcy Judge Thomas E. Bennett recently issued an order allowing Alabama's Jefferson county to continue to declare itself in bankruptcy due to a mismanagement of county funds in 2008, The Associated Press reported.
The source said that Jefferson County, which is home to Alabama's capitol, Birmingham, and more than 650,000 residents, filed for Chapter 9 bankruptcy upon finding itself $4.15 billion in debt. This is now the largest ever municipal bankruptcy case, a record previously held by Orange County, California, which declared itself in debt for $1.7 billion in 1994. The Blaze explained that plans for a new county sewer system, drafted in 1996, are at the root of the problem. The news source detailed that the new system was supposed to total $300 million, but costs quickly ballooned after deals fell through, problems arose and reports of corruption surfaced, and by 2008, $3.1 billion had been funneled into the project. The Associated Press found that the county has been taking steps to be able to pay its debt, such as reducing county staff, closing courthouses and cutting a job tax. The county may want to consider seeking the help of successful debt collection services to make a plan of attack to pay off the staggering debt.