The Associated Press recently reported that Baltimore’s financial situation is so poor that the city may need to file for bankruptcy.
Baltimore’s population dropped from 950,000 in 1950 to 619,000 in 2012, which is having a dramatic impact on local tax revenues. Baltimore already has the highest property taxes in Maryland and the highest taxes allowed under state law.
The median income for a household in Baltimore is $40,000 and 22 percent of its residents live below the poverty line. “We’ve got to go from a vicious cycle to a virtuous cycle. That starts with a good, stable fiscal foundation for the city government,” said Andrew Kleine, the city’s budget director told the AP. “When you’ve lost so much population and the tax base has shrunk, it’s very difficult to deal with.”
Municipalities are allowed to file for Chapter 9 bankruptcy, which allows for a financial restructuring. While Chapter 9 bankruptcy is strictly for cities, towns and states, an individual who has unsecured debt may be facing the same difficult financial decisions and other forms of bankruptcy may be an excellent option for relief.
A Chapter 13 bankruptcy, much like in Chapter 9 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.