If you want to feel better about your own money troubles, take solace in the woes of Puerto Rico. The Caribbean island, which is an unincorporated US territory, is struggling with its debt and enacted legislation that would allow it to restructure debt similar to entities that do have bankruptcy protection, like states.
But the US Supreme Court just ruled that Puerto Rico cannot be a debtor under bankruptcy law, so local legislation passed to restructure the territory's debt is invalid, pre-empted by the federal bankruptcy code. Technically, this a case about preemption, whose laws rule, federal or state. But Puerto Rico is not a state, so the case really highlights the complicated relationship it has with the US and its law. Let's consider the decision.