Tuesday, June 29, 2010

Fiscal Stability in Bankruptcy

The deal late yesterday to keep Rouge Park and 76 other parks in Detroit has prompted a decent amount of discussion on Facebook and elsewhere about how to best maintain financially.  I posted the comment below, which received positive reactions.  I am, therefore, repeating it here.

This is counterintuitive, but the road to fiscal stability for Detroit leads straight to the U.S. Bankruptcy Court. Almost 70% of our tax dollars go straight to debt service, in one form or another. This includes Detroit Public School debt, City of Detroit general debt, the revenue anticipation bonds, and Wayne County debt.

We need a massive reorganization of those debts, on a scale that can only be done under the supervision of bankruptcy judge.

As always, I welcome your thoughts in the comments section below.


Christina said...

We love all your coverage of neighborhoods and local businesses in Detroit. Keep the posts coming cause we have you bookmarked and we'd love to see more!


Dokemion said...

If your non-exempt assets are not enough to cover your debts, bankruptcy allows you to discharge some of your debts, which means they do not have to be repaid. Under Chapter 13 bankruptcy filing, you will be given a new repayment plan that significantly lowers the amount you have to pay, and you will be given a set number of years in which you have to repay your debts.