{"id":21749,"date":"2010-08-28T00:00:00","date_gmt":"2010-08-28T00:00:00","guid":{"rendered":"https:\/\/getirshelp.com\/blog\/4-things-you-should-prepare-if-state-goes-bankrupt\/"},"modified":"2026-07-24T21:58:13","modified_gmt":"2026-07-24T21:58:13","slug":"4-things-you-should-prepare-if-state-goes-bankrupt-2","status":"publish","type":"post","link":"https:\/\/getirshelp.com\/blog\/4-things-you-should-prepare-if-state-goes-bankrupt-2\/","title":{"rendered":"4 Things You Should Prepare for if your State goes Bankrupt"},"content":{"rendered":"

The tax-relief industry loves to make IRS problems sound impossible without them. They're not. I'm Darrin Mish. I've been representing taxpayers before the IRS for 32 years. Let me explain how this actually works.<\/p>\n

The State of Illinois is unable to pay $120.6 billion of their debts. \u00a0Click here to read or watch more IRS Help resources.<\/a> \u00a0Here are some of their debts:<\/p>\n

\u2022\u00a0\u00a0 \u00a0Illinois bond borrowings: $29.1 billion
\n\u2022\u00a0\u00a0 \u00a0Promised pension benefits: $62.4 billion
\n\u2022\u00a0\u00a0 \u00a0Promised retiree health care benefits: $27.1 billion
\n\u2022\u00a0\u00a0 \u00a0Miscellaneous (including payments to nursing homes, child care facilities, etc): $21.9 billion.<\/p>\n

Click here to watch or read more information on IRS Back Taxes.<\/a><\/p>\n

The state Financial Comptroller Dan Hynes, said recently Illinois owes $5 billion to schools, universities, child-care centers and rehab centers around the state.\u00a0 He calls it \u2018obscene\u2019, telling the New York Times: \u201cThis is not some esoteric budget issue; we are not paying bills for absolutely essential services\u201d.<\/p>\n

Having overrun their budget over the years and borrowing to fund the deficits, the day of reckoning has arrived.\u00a0 With billions owed in bond IOUs the state\u2019s credit \u2013 the ability to borrow \u2013 has been depleted.\u00a0 As a result, they are not able to pay their bills.<\/p>\n

Unlike the federal government, state governments cannot print money.\u00a0 So the state has become bankrupt and in a bankruptcy, debts are discharged.<\/a>\u00a0 That means someone loses, whether it is a credit card company, a goods supplier, a medical care provider or mortgage lender, when an individual or company files for bankruptcy.\u00a0 Now when it is a state government that goes bankrupt, the ones who lose are its citizens.<\/p>\n

So what should you do if your state goes bankrupt?<\/p>\n

1.\u00a0\u00a0 \u00a0Save more money before you approach your retirement years.\u00a0 As state funds dwindle, there will be cutbacks.\u00a0 If you will draw a pension from a state agency (or most municipal agencies, school districts, etc) should expect to get less than the promised amount.\u00a0 The federal government does not guarantee state pension payments.<\/p>\n

2.\u00a0\u00a0 \u00a0Prepare to pay more in state income taxes.\u00a0 Any government can only raise money in three ways \u2013 print it, borrow it or tax the citizens for it.\u00a0 Since the first two options are out for a bankrupt state government, the only option left is the third one.<\/p>\n

3.\u00a0\u00a0 \u00a0Prepare to get by on less state services.\u00a0 Whether it be health services, subsidies or child care services, any one of them may be reduced or even canceled altogether.<\/p>\n

4.\u00a0\u00a0 \u00a0Vote a prudent and responsible governor and leaders.\u00a0 We need leaders who will cater for the needs of the people and not their own ego, leaders with the courage to say \u2018no\u2019 to grandiose projects \u2013 high-rise buildings, arts centers, mega events \u2013 that cost the state an arm and a leg simply to gain votes for themselves.<\/p>\n

Don\u2019t wait for your state to run out of money and pay for the consequences.\u00a0 If you yourself are struggling with debts, seek bankruptcy protection.\u00a0 Call us for a free consultation at (813) 200 4133 or visit http:\/\/tampabankruptcy.pro<\/a>.<\/p>\n

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