Motor City Meltdown: What Detroit Bankruptcy Says About Consumers Everywhere
Cities, just like people, sometimes get themselves in so much debt that they can no longer float the monthly payments. This week, Detroit became the largest American city to ever file for bankruptcy. What the Motor City’s financial woes say about the nation as a whole – stocks continue to soar despite the municipal meltdown — is overshadowed only by the parallels this situation has for so many individuals who have reached the end of their fiscal rope. What does a city (or a person) look like when they’re on the verge of going bankrupt? Our PA + NJ bankruptcy lawyers see the signs every day.
Cutting Costs isn’t Enough
The old mantra from the uninitiated is to simply “belt tighten” by reducing spending to get income in line with what money has to go out to creditors every month. That’s all well and good, but it ignores the larger problems of managing a life in real time. Accidents happen. Unexpected costs crop up and demand immediate attention. Detroit cut costs, reducing pensions for state workers and skimping on repairs to amenities you or I might think a city needs. Currently, about 40 percent of the city’s streetlights are dark. They presumably couldn’t afford to repair them, so they stay left them, which in turn allowed the crime rates to continue their steady climb. Think of these blown-out street lights as a symbol for the things you might forgo if you’re on the verge of bankruptcy — an oil change for your car, haircut, maybe new clothes. That missed oil change could be the issue that leads to your car’s engine failure and a cascading series of financial difficulties. The point is, like Detroit, when deep cuts in spending happen with little income, something is going to suffer.
Bankruptcy is the Responsible Choice
Many of our clients experience some degree of guilt about filing for bankruptcy. We tell them all the same thing: continuing to accumulate late fees on credit cards or miss mortgage payments isn’t the smart financial move. You’re damaging your credit and imperiling your finances for years to come by trying to keep your sinking ship afloat. Bankruptcy is not irresponsible. It’s your recognition that you’ve made poor financial choices in the past, or that circumstances have dictated that you can no longer maintain your current lifestyle. There’s no shame in that. Detroit realized that it had to do something to improve the quality of life for its residents and turn the town around for the better. The same is true of you when you decide to hire an attorney and make your case before the court. Something has to give, and you’re prepared to liquidate property or enter into an approved repayment agreement to make amends. That doesn’t sound like irresponsibility to me.
If you, or someone close to you, is experiencing significant financial distress, bankruptcy may be the solution to correct the problem and gain a fresh start. Contact our law offices today for an immediate consultation with members of our experienced legal team. We’ll go over your options for filing and develop the most effective strategy possible to get you, or someone you love, out of this financial mess.
☑ Been paying credit card balances that seem to never go down?
☑ Lost your job and are now having trouble keeping up?
☑ Attempted to work out a payment arrangement to no avail?
☑ Been notified of a mortgage foreclosure action?
☑ Been denied for a mortgage or other line of credit?
If the answer to any of these questions is “yes” then bankruptcy may be an option that you should consider.