Chapter 9 Bankruptcy
Definition - What does Chapter 9 Bankruptcy mean?
Chapter 9 bankruptcy refers to the chapter of the bankruptcy code that protects a debt-ridden municipality (such as a city or a county) from its creditor(s) while the municipality reorganizes its debt and negotiates a debt adjustment plan with its creditors. Chapter 9 differs from other chapters of bankruptcy because a municipality’s assets cannot be liquidated to repay creditors.
Chapter 9 bankruptcy is also called municipality bankruptcy.