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The US city of Detroit has filed for bankruptcy

Detroit stopped making payments on some of its $18.5 billion of debt and obligations last month.

Woodward Avenue in Detroit, Michigan (File photo)
Woodward Avenue in Detroit, Michigan (File photo)
Image: Wikimedia Commons via Wikipedia

THE CITY OF Detroit has became the largest city in US history to file for bankruptcy protection, according to court documents.

Once the fourth largest US city, Detroit has seen its population shrink by more than half, from 1.8 million in 1950 to 685,000 today, as crime, flight to the suburbs and the hollowing out of the auto industry have eaten away at its foundations.

“The citizens of Detroit need and deserve a clear road out of the cycle of ever-decreasing services,” Michigan Governor Rick Snyder said in a letter accompanying the court filing.

“The only feasible path to a stable and solid Detroit is to file for bankruptcy protection.”

Detroit stopped making payments on some of its $18.5 billion of debt and obligations last month. Snyder appointed an emergency manager with a background in bankruptcy earlier this year to restructure Detroit’s finances.

He said he had “very much hoped” the move would help the city avoid bankruptcy, but that now it is time to “face the fact that the City cannot and is not paying its debts as they become due and is insolvent.”

He listed a host of problems that prove Detroit cannot meet its obligations to its citizens either.

The homicide rate is the highest in nearly 40 years, and, for more than two decades, Detroit has been on the list of the most dangerous cities in the United States.

People have to wait an average of 58 minutes for the police to respond to their calls, compared with an average of 11 minutes nationwide.

A lack of funds for maintenance and repairs means only a third of the city’s ambulances work and police cars and fire trucks are also in poor condition.

There are 78,000 abandoned buildings scattered across the city, and 40 percent of the streetlights don’t work.  The city’s tax rate has reached its legal limit and even if it could raise rates, residents can’t afford to pay more, Snyder said.

© AFP, 2013

Read: Want to see pictures of Detroit’s almost-finished Robocop statue?

About the author:

Hugh O'Connell

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