This panel examines the political and financial contexts within which communities address fiscal stress. Although the options are quite large, the panel explores a number of questions. How does the initiative process shape incentives and options for managing fiscal stress and related issues? What happens when a city falls behind in its responsibilities to provide timely financial reports and budgets? What constitutes insolvency? Why was AB506 adopted and how has it shifted the rules of the game in managing fiscal stress? Is municipal bankruptcy really so terrible? What kinds of deals can localities strike with their creditors and contractors to reduce the magnitude of debt burdens and fiscal stress? Is it possible to restructure local finances without succumbing to bankruptcy?