Countries Teetering On The Brink Of Bankruptcy

28 Oct Countries Teetering On The Brink Of Bankruptcy

With the current global economic situation, you’re probably not surprised to hear that several companies are on the verge of bankruptcy.  However, this disturbing trend isn’t stopping at the corporate boardroom; it is beginning to affect nations.  According to the International Monetary Fund, several countries, such as Ukraine, Hungary, Pakistan, and Iceland, are dangerously close to being officially declared bankrupt as well.  As of October 22, the IMF had also begun talks with the government of Belarus.

As of October 26, the IMF is planning to make a loan of $16.5 billion to Ukraine and is in talks with the Hungarian government for a similar loan.  The economic crisis hit the Ukrainian steel industry, which is one of the nation’s leading exports.  The IMF is planning a similar loan to prop up the equally struggling Hungarian economy.  However, these nations have not seen the economic turmoil that Iceland has been experiencing.

On October 9, Iceland teetered on the brink as the government put a stop to stock trading and took possession of the last independently operated bank.  This made the Icelandic króna, the nation’s monetary unit, all but worthless.   On October 24, the IMF agreed to a $2.1 billion loan to help prop up Iceland’s economic situation.  A summit of world leaders is scheduled for November 15 to discuss the global economic situation.

What does all of this mean for us here in the United States?  On the bright side, it means that even though our economy is clearly in a recession, things could be much worse.  On the other hand, this is an indicator of the severity of the economic crisis.  As more rough times seem to be on the horizon, this is an excellent time to get personal finances in order.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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