The U.S. Supreme Court agreed Friday to consider Puerto Rico's appeal of a ruling forbidding its use of a US law that would allow it to declare bankruptcy and restructure its crushing debt.
Puerto Rico — a US possession in the Caribbean since 1898 — is attempting to restructure much of its $72 billion of debt.
Officials in San Juan have made clear that it might miss debt payments in the next month without some relief from creditors and legislative support.
The Supreme Court will likely review the case sometime during the first three months of 2016.
Governor Alejandro Garcia Padilla recently told a Senate panel that Puerto Rico's situation is hampered by creditors that refuse to reschedule its debt, and by US laws that prohibit the territory from entering bankruptcy protection.
The 3.5 million island residents are US citizens, but since the island is not a state, they do not have a voting representative in the US Congress.
Puerto Rico's finances were dealt a crippling blow in 2006 with the loss of federal tax breaks for US companies with local operations.
It has been in and out of recession in the years since. As economic activity shrank, the government papered over budget shortfalls with fresh borrowing.
Today, its debt stands at around $72 billion (64 billion euros), and the White House has ruled out a financial bailout for the former Spanish colony.
Currently, only US cities can legally go into what is known as Chapter 9 bankruptcy protection. Detroit took this drastic measure during the depths of an economic crisis in 2013.
Puerto Rico officials on Tuesday made a $354 million bond payment after threatening for days to default.