기존의 도산제도를 통해 본 우리나라 지방자치단체의 도산

What has happened when a city goes bankrupt? As this question suggest, the bankruptcy of a municipality raises fundamental issues regarding the nature of the city. Do the creditors take over city hall and the city’s streets and alleys? Can the creditors obtains a lien on the city’s primary source of income: taxes? What is the goal of the municipal bankruptcy laws? Although cities are legally classified as municipal corporations, the purposes of U.S. federal municipal bankruptcy laws resemble individual bankruptcy more than corporate bankruptcy: municipal bankruptcy is based on the idea of the fresh start rather than the efficient reconfiguration of assets. Based on this idea, filing for bankruptcy can be a useful tool in alleviating financial distress: It allows municipalities to make use of bankruptcy's automatic stay provisions to negotiate payments with creditors in U.S. However, municipal bankruptcies are rare and are generally met with political disfavor. The financial constraints of local governments here in Korea, mostly caused by the mismanagement of the authorities and the economic slowdown, have been intensified. In recent years many municipalities, including major metropolitan centers, have been confronted with skyrocketing expenses, a declining tax revenue base and a resulting dependence on intergovernmental aid. As prospects for financial distress have grown, it is evident that this system which deals with local government financial status has been rendered archaic and incapable of providing an adequate remedy for municipal insolvencies. The local borrowing system in Korea is regulated by the central government according to the nature of projects and the repaying ability of local governments. While projects benefit the public and are reflected in the mid-term financial planning, issuing authorities should be capable of redeeming principle amount and interest. Also, the local bond market heavily relies on public funds, thus, crippling the market mechanism. This means there is no possibility of municipal bankruptcy cause systemic risk. However, municipal bankruptcy links with sovereign default because local government credit rank reflects central government's. This Article analyzes the ways in which the legal status of municipalities affects these aspects of bankruptcy law, compare the mechanisms of common bankruptcy system and a municipal bankruptcy system and recommend to create local bond market for operation of market discipline.