The bankruptcy case of Puerto Rico

Puerto Rico faced a severe financial crisis due to high debt levels, economic decline, and natural disasters, leading the territory to declare bankruptcy in 2017. This unprecedented action was facilitated by the Promesa Act, which established a process for restructuring public debt. The aim was to relieve Puerto Rico’s $70 billion debt burden, enable better management of public services, and restore economic stability. The case highlighted the challenges of U.S. territories regarding bankruptcy protections and fiscal autonomy, raising broader questions about governance and support for affected regions.