According to the Washington Post, the city of Detroit has laid out a plan for exiting bankruptcy that will call for slashing pensions for non-uniformed retirees by nearly one-third and repaying bondholders just $1 of every $5 owed to them by the city.
The paper reported that the plan, filed in a federal bankruptcy court in Detroit, lays out potential cuts for the first time since the city filed its $18 million bankruptcy case in July 2013.
“The plan would also cut pensions for police and firefighters, many of whom do not receive Social Security benefits, by 10 percent,” the Post reported. “City union leaders and retirees reacted to the plan with alarm, saying it would inflict undue pain on current and former city workers who are not responsible for the city’s dire fiscal problems.”
The plan still needs the approval of the court as well as the approval of several creditors, which may be difficult. Two of the city’s biggest labor unions, the United Auto Workers and American Federation of State, County and Municipal Employees Council 25, who represent workers, have said that any cuts to worker pensions would be state constitutional violations.
When Detroit filed for Chapter 9 bankruptcy, it became the biggest municipal bankruptcy in U.S. history.
I Need a Washington D.C. and Maryland Bankruptcy Attorney
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.
Chapter 13 bankruptcy is an outstanding option for individuals who have a standard income, but have fallen behind in payments and/or are about to lose their house or car. Under a Chapter 13 bankruptcy, you can save non-exempt assets and stop the threat of repossessions, and get on the path to financial strength.
It should also be noted that if you meet a certain income standard, you may be able to file for Chapter 7, which allows you to discharge debts like medical bills and credit card balances.
If your financial situation is a problem and you want to end collection attempts or discharge debts, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation.
Law Firm of Kevin D. Judd
Judd’s Judgment: In 2012, 73 percent of the business bankruptcy cases filed in Maryland were Chapter 7.