According to Bloomberg News, the mayor of a small California town weighing bankruptcy is asking for prayers from members of her community.
“We are in a tough spot,” Atwater mayor Joan Faul told a reporter with Bloomberg. “All I can say, sir, is keep us in your prayers. We will need it.”
Atwater is located about 100 miles southeast of San Francisco and has a population of 28,000. The city is facing a $3.3 million deficit, with dwindling property tax returns causing debt to mount.
Bloomberg reports that the “median household income in 2010 was $42,226, 19 percent below the national average of $51,914. Almost a fourth of the population is considered below the poverty line, compared with 13.7 percent statewide, according to U.S. Census figures.”
The news service reports that the housing market crash has caused the city’s tax revenue to plummet. “The housing crash cut Atwater’s median home price by more than half, to $140,000 in the fiscal year that ended in June from $336,000 in the same period in 2007. Unemployment surged to 21 percent,” Bloomberg reported.
Atwater’s City Council will vote this week on a resolution that will allow it to file for Chapter 9 bankruptcy, much like other California cities we’ve blogged about (including San Bernardino and Stockton) have. The bankruptcy will allow Atwater to restructure its debt and come up with a payment plan.
Much like a Chapter 9 bankruptcy, a Chapter 13 bankruptcy allows people to keep control of their possessions while working on a repayment plan and restructuring debt. If your financial situation is a problem, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation.