After the state of Michigan appointed an emergency financial manager, Kevyn Orr, to resolve the financial crisis of the city of Detroit without filing bankruptcy, Governor Rick Snyder approved the filing of the Chapter 9 bankruptcy petition for the city of Detroit on July 18. As of now, Detroit has $20 billion in long-term debt and its only option was to file for municipal bankruptcy. This is the largest Chapter 9 municipal bankruptcy petition in US history. Experts predict that it will not be the last. Orr tried laying out alternatives for dealing with the City’s long-term debts, including further change in pay rates and staffing, reducing interest rates, stretching out payment schedules and outright forgiveness of principal or refinancing but it was not enough to keep Detroit from seeking a bail-out from the government.
To learn more about Municipal bankruptcies, call the Law Offices of Michael H. Raichelson in Woodland Hills, California near Los Angeles.