What happens when a state goes bankrupt?

Simple: States Declare - Force Majeure - Wipes the slate clean and the parties are free from all liabilites and obligations.

I'm surprised more mortgage borrowers are not using this clause to get out of their obligations. We are at War and every mortgage contains a force majeure clause. At minimum a good attorney should be able to postpone payments until the war is over.

This clause is contained in virtually every contract: Insurance, Loan Agreements etc. When ever the US declares war all contracts in essence become voidable or at least that is what one can claim and tie things up legally for a few years.
 
Quote from PocketChange:

Simple: States Declare - Force Majeure - Wipes the slate clean and the parties are free from all liabilites and obligations.
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Wouldn't you need a typhoon, earthquake or nuclear attack for that?

I could see the government lighting off a nuke in California just for this purpose... after all it IS money we're talking about...
 
Two different angles.

One is to permanently get out of the obligation.
This is what insurance companies, corporations and government use to get out via a court order.

Two is to tie it up in litigation by claiming Force Majeure.
Individuals can use to stall or get out of Mortgages, Car Loans, Credit Card Debt etc.

Any extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, bail out etc can be the basis of the claim.

A 10 minute one page pro se filing will likely cost the other side
$20K in legal fees and tie it up in the courts for one year. Even if you lose you win time and can appeal with another one page filing..

In the end if you are bankrupt you are essentially judgment proof and the other side is not going to piss away a bunch of cash in litigation.


Quote from Scataphagos:

Wouldn't you need a typhoon, earthquake or nuclear attack for that?

I could see the government lighting off a nuke in California just for this purpose... after all it IS money we're talking about...
More...
 
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