Bankruptcy Alternative – City matters are much like personal matters.
Do you ever read the news and wonder how entire cities can file for bankruptcy? Just last week, Detroit earned the dubious honor of becoming the largest city in the United States to file for bankruptcy – for $18.5 billion. This article from the Washington Post does a good job at concluding the reasons as to why the Motor City’s engine stopped revving.
When I think about Detroit, the three words that pop in my head are: ghastly, abandoned, and dusty. If you do a Google image search for ‘abandoned Detroit,’ you will want to take a hot chemical bath afterwards to remove the make-believe termites that are crawling all over your body. This is in stark contrast to the Detroit I heard about during the 1950’s and 1960’s when the car manufacturing business was booming and houses had windows. But the more I delve deeper and burn the visuals of Detroit at present into my retinas, ‘Heyday Detroit’ feels about as realistic as Ponce de Leon finding the Fountain of Youth in Florida during the turn of the 16th century.
On a micro level, many consumers can find themselves in a similar position as Detroit, albeit not nearly as massive. For instance, when perusing the reasons as to why Detroit now owes $18.5 billion to its creditors, it looks like a simple calculation of overspending and a bad economy mixed with high crime rate. Since this algorithm was calculated by factoring in “decades of bad governance,” it seems like Detroit was a perfect storm for financial ruin. For instance, imagine if you were in credit card debt and your identity was stolen, your spouse had a shopping addiction, and you got laid off all within the same year.
The city’s “emergency manager” tried to persuade the city’s creditors to let them off the hook and repay only a percentage of their obligations but was unsuccessful. If Freedom Debt Relief could successfully settle the debts of entire municipalities, then perhaps the other cities on this list could desperately use our help. But even so, in Detroit’s case, the city is way beyond the help that debt relief can provide and has filed for bankruptcy. The situation in Detroit is a reminder that debt can single-handedly wring a place, and person, dry of all vitality, security and prosperity. At Freedom Debt Relief, we try to help all our clients resolve their debt before the necessity of bankruptcy kicks in.
While Detroit shambles its way through repaying its creditors and goes through an inevitably lengthy litigation process, there is a possible silver lining: what if millenniums from now explorers stumble upon the ruins of Detroit and think they have discovered the lost city of Atlantis flooded underneath Lake Erie. Eat your heart out, Toronto!