On July 18, 2013, US history was made. Detroit, the largest city in the State of Michigan, filed for bankruptcy after failing to maintain control on its estimated $18-20 billion of crippling debt. This figure made the now infamous Detroit bankruptcy the largest municipal filing in U.S. history. Additionally, no other U.S city with a population even half as large as Detroit’s 714,000 has ever had to file – the closest was the 2012 bankruptcy filing of Stockton, California, boasting a population of little over 290,000.
It is hard to believe that over a year has passed since that announcement was made. Time flies.
Towards the end, things were getting rough in Detroit – with a reported 5,000 cases of arson and over 80,000 homes destroyed. Morale was low among the residents, and with unemployment up over 18%, revenue down 40%, and three times the number of retirees claiming benefits over the number of employed workers, how could you blame them? The facts and figures surrounding the Detroit bankruptcy filing really are quite alarming.
A year may have passed since the city filed, but Detroit was experiencing a decline in the years leading up to its end. For example, it had 11,000-12,000 fires every year in the decade prior to bankruptcy. Industry was also on the decline – in the last 60 years alone, the number of manufacturing jobs in Detroit dropped from 296,000 to just 27,000, – that is a 91% decline. The city’s state of affairs became a sorry sight at the end, particularly when comparing it to what it once was: a thriving US community with the highest per-capita income in 1960. But nowadays, things are very different. Today there are around 78,000 abandoned homes in Detroit, many of which can be bought for less than $500. That’s less than what you would pay for a new computer.
However, this is not expected to last. It is hoped that by September 2014, Detroit will be out of the bankruptcy court. Plans are in motion to form an optimistic future for the city and its residents: natives are being recruited back into the city, as well as $816 million being used to limit pension cutes and protect the Detroit Institute of Arts (DIA) from a fire sale. Since the filing in 2013, 50,000 streetlights have been replaced, homicides are down 18%, trash collection has become privatized and robberies are down 25%.All of these initiatives are steps in the right direction, towards the rebirth of Detroit as the thriving economy it once was.
This just goes to show that no matter how drastic your financial situation is, or how publicized it becomes, the situation is not permanent. If you are considering filing for bankruptcy, you need to know that there is always a way back to full recovery, and you can always get back on the road towards a fresher financial future. There are many EOUST-approved providers of the required Credit Counseling and Debtor Education, to help you on your way to having your debts discharged. No matter what your situation, by being proactive about your financial future, you too can start fresh with a tighter grip on your finances and a spring in your step!