The state ban on Harrisburg filing for bankruptcy expires in just a few days and city leaders are hoping this gives the city the extra help it needs to solve the financial crisis.
On Friday, Harrisburg will legally be able to file for bankruptcy. But it's not going to happen right away.
In fact, city leaders have some more work to do to try to avoid it. But it could happen.
No capital city in American history has ever declared bankruptcy. But Harrisburg could soon be the first.
On November 30, the state's year-and-a-half ban on the capital city filing for bankruptcy will expire. Originally, the ban was to expire back in July, but it was extended by five months. Something the receiver did not want to see happen.
"Bankruptcy is something that absolutely should be on the table,” explained the receiver’s spokesperson, Cory Angel. “This is a difficult situation and we have to have all the options available to us to get us through the situation."
Before Harrisburg can file for bankruptcy, it must be able to show a judge it tried to avoid it. That's why taxes have been raised, city assets will be sold or leased and negotiations with city creditors are underway.
But if all that doesn't work, bankruptcy will be the last option.
"It's important for people to realize that we remain focused on implemented the recovery plan,” Angel continued. “You can't just walk into bankruptcy court and throw your arms up and say you can't pay. We have to be able to show we've done all we can do to meet our obligations to our creditors."
The Mayor and City Council agree with the Receiver that the ban must expire and bankruptcy must be used as a tool with the creditors.
On Friday, Harrisburg will legally be able to file for bankruptcy. But it's not going to happen right away.
In fact, city leaders have some more work to do to try to avoid it. But it could happen.
No capital city in American history has ever declared bankruptcy. But Harrisburg could soon be the first.
On November 30, the state's year-and-a-half ban on the capital city filing for bankruptcy will expire. Originally, the ban was to expire back in July, but it was extended by five months. Something the receiver did not want to see happen.
"Bankruptcy is something that absolutely should be on the table,” explained the receiver’s spokesperson, Cory Angel. “This is a difficult situation and we have to have all the options available to us to get us through the situation."
Before Harrisburg can file for bankruptcy, it must be able to show a judge it tried to avoid it. That's why taxes have been raised, city assets will be sold or leased and negotiations with city creditors are underway.
But if all that doesn't work, bankruptcy will be the last option.
"It's important for people to realize that we remain focused on implemented the recovery plan,” Angel continued. “You can't just walk into bankruptcy court and throw your arms up and say you can't pay. We have to be able to show we've done all we can do to meet our obligations to our creditors."
The Mayor and City Council agree with the Receiver that the ban must expire and bankruptcy must be used as a tool with the creditors.