A municipality filing a bankruptcy petition must be insolvent or unable to meet its debts as they mature, desire to effect a plan to adjust such debts, or have attempted to work out a plan without success. When a petition is filed, the claims against the debtor come to an automatic standstill. Chapter 9 of the U. S. law protects both the governmental powers of the debtor and individuals affected by the plan. Affected taxpayers, as well as employees of the municipality, have a right to be heard and to defend their interests. The living standards of the indebted municipality's population are protected.
Populations affected by repayment of debt have a right to be heard in negotiations on payments.
Disclosure of bank accounts, so that flight capital from corrupt politicians can be returned to indebted countries. In cases where banks and governments knowingly grant credits for unprofitable projects, they would lose their right to claim repayment. According to Professor Raffner, an international insolvency procedure should not be established in a debtor country, as the courts are likely to be biased. Therefore, an international court of arbitrators is necessary, as is usual under international law. This international court of arbitrators would enforce economic reasoning in establishing the ability to pay, taking account of necessary expenditures for social safety nets to protect a minimum of human dignity among the poor, and considering the debtor country's economic future.