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Bankruptcy May Be Your Option

Is bankruptcy a viable second chance for struggling city?

One American city’s continuing quest for debt relief has captured the nation’s attention over the recent past. The once booming industrial city is going through the largest public bankruptcy in American history.

In a recent attempt to shore up its finances, Detroit has been lobbying for a multimillion dollar lump sum from its respective state. The payment is supposed to go to the pension funds and prevent the sale of valuable artwork. The pension rescue has also been helped by funds from various foundations and philanthropists.

The bankruptcy manager has been pushing for a one off payment rather than payments spread out over 20 years to the pension funds. This is all part of a strategic plan to get out of bankruptcy later in the year.

The repayment plan is scheduled to come up for a vote by creditors soon. It also needs approval from a judge by the end of September. The city wants to completely dispose of its obligation to pay welfare and health care benefits to retirees. Apart from the lump sum, they intend to pay out $450 million, eliminate death benefits and turn health care coverage for pensioners over to trusts.

Lawmakers also have to approve the lump sum.

While Detroit is far from Oklahoma, many of us here have been captivated by the city’s bankruptcy saga. It might be because many people can relate to the city’s trials on some level. Managing financial challenges is not an easy task. As much as this Midwest city is an example of the consequences of crippling debt, it also illustrates that it is possible to deal with the problem. U.S. bankruptcy law allows second chances to individuals, business and even cities.

Those who are struggling with overwhelming debt here in Tulsa may benefit from talking to an attorney about their debt relief options. It may be possible to pursue bankruptcy in order to either wipe the slate clean or come up with reduced and manageable payment plans.

Source: News9.com, “Detroit expecting $195M lump sum from Michigan” Ed White, May 5, 2014

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