Washington Park, Illinois: The Village That Tried to Go Bankrupt Twice

Washington Park, a small village just east of the Mississippi in St. Clair County, holds the unusual distinction of having filed for municipal bankruptcy not once but twice, and been turned away both times. The village first filed for Chapter Nine protection in two thousand four, citing one point six million dollars in debt, but the case was dismissed when the village briefly clawed its way back to solvency.

In two thousand nine it filed again, listing assets of less than fifty thousand dollars against debts topping one million. This time a federal judge dismissed the case on a more fundamental ground: Illinois state law does not authorize its municipalities to file for bankruptcy at all. The debts themselves were vivid.

The village owed money to trash collectors, to pension funds, and to others. Federal authorities had also seized records from village hall, adding a separate federal investigation to the village's financial woes. The village was founded in nineteen twenty three, and its population fell from five thousand three hundred forty five in the year two thousand to two thousand five hundred ninety two in twenty twenty.

The judge who threw out the second case was Pamela Pepper, who ruled in December of twenty ten that no state law lets a municipality declare bankruptcy there.