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With irresponsible borrowing and excessive leverage threatening the financial well-being of so many families, at least one county may be joining them in the soup line.

Jefferson County, Alabama, with a population of 662,047, according to the 2000 U.S. Census, is preparing for a possible bankruptcy filing, according to The New York Times.

Birmingham, Alabama skyline

The culprit? $3 billion in bonds with rapidly escalating interest rates resulting from the exact same short-sighted financial planning that got so many home owners into trouble: adjustable rate loans (In this case, auction rate securities) that require higher interest payments as interest rates move up. The current turmoil in the credit market has sent the county's rates as high as 10%.

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Alabama county mulls bankruptcy; could be largest failure in history originally appeared on BloggingStocks on Wed, 27 Aug 2008 05:00:00 EST. Please see our terms for use of feeds.

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