On July 18, 2013, Detroit filed for Chapter 9 bankruptcy protection in the Eastern District of Michigan, Southern Division (case number 13-53846). This is the largest municipal bankruptcy filing in American history! Detroit has a reported 18 billion dollars in debt, and included in that 18 billion is billions of dollars owed to approximately 23,000 retirees. The city was reportedly running a deficit of $1 million dollars a day at one point. (New York Times).
At this time it is unclear whether or not Detroit will be allowed to remain in bankruptcy and reorganize their obligations. Individual debtors can reorganize their obligations in a Chapter 13 bankruptcy, and in an individual bankruptcy filing the viability of the case is easier to predict. In individual cases it is a rare occurrence when other parties try to block the debtor's access to bankruptcy protection.
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