July 1, 2013 8:16:21 AM
BIRMINGHAM -- Attorneys for Alabama's Jefferson County have filed a 101-page plan that would allow it to exit the largest municipal bankruptcy in American history.
The plan filed Sunday calls for cutting the county's $4.2 billion debt by more than $1.2 billion and raising sewer rates annually by 7.41 percent for four years. Rates would rise by 3.49 percent annually for an undetermined amount of years after that.
Most of the $4.2 billion debt stems from bonds that funded sewer system repairs.
The plan must be approved by creditors and ultimately Thomas Bennett, U.S. Bankruptcy Judge for the Northern District of Alabama. A hearing is scheduled for Aug. 6.
Home to the state's largest city of Birmingham and more than 650,000 people, Jefferson County filed for bankruptcy in 2011 after three years of negotiations failed to result in a settlement to pay off the debt.