Illinois, along withColoradoandOregonlimit Chapter 9 filings within their states; however, Georgia andIowapretty much ban Chapter 9 filings except in very rare occasions. Chapter 9 covers municipal cases and has been around since 1934 when local governments went under because of the Great Depression.
Even though federal law governs Chapter 9 bankruptcies, they are limited by the 10th amendment of the Constitution and by state and local laws. For more about Chapter 9 bankruptcies see, “FACTBOX-U.S. municipal bankruptcies come in many flavors.”
