Unfortunately, it’s becoming more common these days to hear of a city filing for bankruptcy. While the news was last tuned in to the major bankruptcy case in Jefferson County, Alabama, the public’s attention is now turning to Stockton, CA, a city of 292,000 people that filed for Chapter 9 bankruptcy on June 27, 2012.
What it Means
Essentially, the city of Stockton’s new budget takes effect on July 1. If the city doesn’t petition for bankruptcy, then it will have to default on $10.2 million in debts!
In addition to this default, Stockton would also have to cut $11.2 million in retiree benefits, union contracts, and employee pay. Again, a very dire situation, indeed.
The City Council voted in favor of filing for Chapter 9 in a 6-1 vote, a story that Americans are starting to hear increasingly often. Since 1981, there have been 42 cases of municipal bankruptcies. Ten of those cases (or, 24% of them) have been in the last four years alone! This is a shocking figure for everyone.
While Stockton, CA, tries to regain a hold on its own financial situation, many individuals are finding the relief they need by filing for bankruptcy, be it complete liquidation in Chapter 7, or with debt consolidation found in Chapter 13.
If you are struggling to work through your debts, bankruptcy might be a great option for you to look into! Contact us today to see how we can help.