Getting a loan from the bank is again become easy like in the past before the recession of 2008. Banks put great hurdles in the way of getting a loan from banks after the 2008 recession. But what happened next is not expected by banks because they thought they are the only player in the market and people will always depend on them for the loan and other financial support. But when they place strong conditions on the loan process some private companies show up in the market which start providing loans. So people start moving toward them because they are providing loan easily for a shorter period but charge a high-interest rate.
Even the interest rate is high from banks people start getting a loan from these companies because the loan process in banks was slow. So when the bank sees the condition of the market they review there polices and start working on a new option that how they can get back their customers and provide those services. So for that, they introduce new loan options with easy process and more security. They start providing credit cards to their customers so they can get a loan whenever they want. In the credit card, they have to go through that extended loan process just once and can use the credit card for years. So now what people start doing is they get a credit card from all banks and fulfill their requirements from that card.
But one thing they are doing now when they have to pay back the debt is consolidate debt. So what the do is they get a loan from different sources and when they have to pay it back they go to another bank get their credit card and pay all previous debt from that new card so it will help them to play around with debt.
The same way there is a term of municipal bankruptcy this is a law introduced by congress. The purpose of this law is to provide financial distressed municipality protection from its creditors. It provides them some time so they can develop a new plan to negotiate with the creditors for adjusting their debt. So when we talk about reorganizing the debt of a municipality is typically accomplished either by extending debt maturities, reducing the amount of principal or interest. There is another way as well by which you can seek this out is by obtaining a new loan to pay the previous one.