Detroit files for largest municipal bankruptcy in US history

by Cody Nelson

Detroit became the largest U.S. city to file for bankruptcy on Thursday.

After years of economic turmoil, the city’s emergency manager, Kevyn Orr, asked a federal judge for Chapter 9 bankruptcy protection, the Associated Press reports.

The filing needs to be approved by Michigan’s governor and the courts, but would offer Detroit protection from the groups negotiating about $18.5 million in debts from the city, the Detroit Free Press reports.

According to the AP report, Detroit’s current budget deficit is estimated at more than $380 million, with at least $14 billion in long-term debt.

As Detroit’s economy has gone down, so has its population. The city lost more than 237,000 residents between the 2000 and 2010 censuses, which is about a 25 percent population decline.

Chapter 9 bankruptcy is rare, so the Detroit Free Press wrote a guide explaining what it could mean for the city. The Atlantic has a link to the documents of the filing.