MINNESOTA
Minnesota Public Radio
The Archdiocese of St. Paul and Minneapolis has filed for Chapter 11 bankruptcy protection. But what does that mean? And what will it mean for local parishes, schools and parishioners?
What is bankruptcy?
Filing for bankruptcy allows an organization to put together a plan to pay its debts by dividing its assets among its creditors. When an organization files for bankruptcy, it must declare its assets (what it owns) and its liabilities (what it owes).
But just because an organization files for bankruptcy doesn’t mean it will automatically be granted that status.
A federal bankruptcy judge must approve the organization’s petition for the bankruptcy to move forward.
Bankruptcy law is governed at the federal level — states do not have the authority to regulate bankruptcy — and is handled in U.S. Bankruptcy Court, which is a branch of U.S. District Courts. The Minnesota district has locations in St. Paul, Minneapolis, Duluth and Fergus Falls.
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