Puerto Rico is about to default on bonds that are only a small part of the total $72 billion of debt managed by the Government Development Bank (GDB).

The GDB, the powerful principal financial authority for Puerto Rico, is scheduled to pay $355 million on December 1, as part of the payment of the general obligation debt. These payments cover the principal and interest on the debt issued by the bank, thereby making it a top priority for the country.

If the country defaults on this payment, Moody's November 11 report predicts that it "would likely trigger legal action from creditors, commencing a potentially drawn-out process absent swift federal intervention."

Ted Palatucci, partner at Andres Capital, told CNBC how he thought Puerto Rico could get out of the situation. "This problem is so big and there's so many interested parties that the referee is going to have to have a very big whistle. It's very hard to see what other alternative solution is going to work without an intervention by the U.S. government." 

The debt started when the Government Development Bank (GDB) was given powerful abilities by the United States to help Puerto Rico's development. The GDB could now, as the New York Times describes, "... advise the government on transactions, to vet and restructure bond deals... to borrow money for other government agencies... to finance private enterprise." Puerto Rico was also granted the strange power to grant bonds that were not subject to any federal, state, or local tax.

As the desire for development grew, but the economic growth did not, the GDB continued allowing entities to borrow money. That generosity also extended to those entities that could not promise a source of repayment.

The laws in place at the time also did not cover public corporation providing services like electricity or drinking water. The loopholes from those oversights also contributed to the large amount borrowed. One entity, Puerto Rico's Electric Power Authority issued a restructuring agreement with its bondholders for the $8 million owed.

In June 2015, Governor Alejandro Garcia Padilla announced that the $72 billion debt was "not payable." Because Puerto Rico is considered a United States territory, the country is unable to file for Chapter Nine, the public sector bankruptcy law.  The country was even unable to pass its own version of the US law, with the courts deeming that "municipal bankruptcy falls exclusively under federal jurisdiction."

Padilla's only hope is that the US Congress hears his plea to allow the country fall under the jurisdiction of the Chapter Nine law. Obama's administration has proposed a new legislation that would restructure more of the debt but it has yet to win approval of Congress.