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Detroit: On the Brink of Bankruptcy

Detroit: On the Brink of Bankruptcy

Posted By Detroit Bankruptcy Lawyer || 30-Jun-2012

Detroit – Once the center of American automotive manufacturing with jobs galore during its powerful reign is now facing bankruptcy unless the state of Michigan is able to come up with $80 million dollars desperately needed to keep the city afloat. Recently, the city's Mayor Dave Bing announced plans to cut back on spending by shutting off street lighting in large sections of Detroit.

Detroit, home to 713,777 people is America's 19th largest city. The city has been struggling to meet its demands since April when the mayor and the city council approved an agreement whereby control of Detroit's finances would be handed over to the state of Michigan. Detroit's lawyer, Krystal Crittendon who was never consulted on the agreement has filed a lawsuit stating that the agreement is in violation of the law because it contravenes the city's charter.

According to the charter, the city is prohibited from entering into agreement with parties that owe the city money. Crittendon's lawsuit is alleging that the state of Michigan owes Detroit approximately $220 million dollars, and she is asking the judge to abolish the agreement. The lawsuit angered the state, and the state's response said that if the lawsuit still stands, it will cut off crucial funding to Detroit. In an emergency meeting, the mayor demanded that the lawsuit be dropped immediately, insisting that the city respects the state's role in ensuring Detroit's survival. "We want to push this (co-operation) forward as fast as we can so we can get the cash to run the city," he said. "Without that we're dead."

At the peak of automotive production, the city's automotive plants provided jobs to thousands of Detroit residents, boosting Detroit's economy. Today, the plethora of automotive jobs is a thing of the past and the largest source of employment comes from city services with Detroit's public school system topping the list with more than 13,000 jobs. The city's second largest employer is the city of Detroit itself, employing 12,400 residents.

Manufacturing in Detroit has taken a big hit, with 271,600 jobs in 2006 with just 186,800 jobs four years later in 2012. Detroit's unemployment rate averages around 20.2%, compared with the state of Michigan at 10.4%. It's obvious that people in Detroit are hurting for reasons far beyond their control. If you are considering filing for bankruptcy, a Detroit bankruptcy lawyer from the Law Offices of Marshall D. Schultz is here to offer you guidance and reliable advice during this difficult time.

Categories: Bankruptcy

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