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San Bernardino to Resume Pension Payments

Posted on in Bankruptcy

Some good news came for San Bernardino, California residents in mid-April when the city announced that it “will resume paying into the state pension fund on July 1,” according to Reuters News. Yet with this announcement came the information that the city will, at the same time, “continue to renege on other debts including payments to bondholders.” The city was the first in a debt-stricken state to halt all contributions to the city's pension fund—the nation's largest. This, of course, was unwelcome news to the many Californians who rely on pension payments as the only way to make ends meet. According to the 2013 budget recently released, other creditors will not be paid while the city will “resume payments to Calpers.” The city will not, however, make “interest and principal payments on $50 million in pension bonds issued in 2005.”

According to U.S. Bankruptcy Court statistics, there were 187,322 total bankruptcy filings in California in the 12-month period ending in December 2012. The vast majority of these were nonbusiness filings, and the majority of nonbusiness filings were filed as Chapter 7 bankruptcies. According to Governing.com, since 2010 there have been 33 municipal bankruptcy filings since 2010. While Stockton, California is the largest municipality to file bankruptcy thus far, San Bernardino is the most recent. The city filed for bankruptcy “after City Council members learned the city had only $150,000 left in its bank accounts,” according to Governing.com.

Losing a pension payment is definitely one reason that a person could end up filing for bankruptcy. Most people that rely on pension payments have little other income sources, and if payments are suddenly reduced, it could hit the family heavy-handedly.

If you or someone you know is considering filing for bankruptcy because of a loss or lowering of pension payments, don't go through it alone. Contact a dedicated Illinois bankruptcy attorney today.

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