When Detroit filed for Chapter 9 bankruptcy earlier this summer, part of its obligation was to have its debt reduction plan approve by its creditors, or the people that it owes money to. While there have been numerous proposals or ideas, none have been approved by the creditors so far. However, this past week, Detroit proposed a newÂ and detailed plan where it has laid out how its creditors will be paid, and how it plans to accumulate funds to helpÂ reduce its debt, as reported by the Wall Street JournalÂ in a January 29, 2014 article.
A Chapter 9 bankruptcy can only be filed by municipalities, and it helps them to manage or reduce their debt. When Detroit filed in the summer of 2013, it became one â€œof the nation’s largest municipal bankruptcy case.â€ The city owes about $18 billion dollars, and it is really trying to save the art that the city has, as one of the earlier plans was to sell the cityâ€™s art to help repay its debt. The city was able to collect about $800 million, and this should be enough to help pay off the pension funds that it has to maintain for the cityâ€™s workers. In addition, the city has to have this plan approve by the pension companies before it can move forward.Â Moreover, in less than two weeks Detroit has to submit a final plan which must be approved by the court before it can move ahead and try to get back onto its two feet.
At Jayson Lutzky, P.C., we handle personal bankruptcies. If you are considering bankruptcy, then you should consult with an experienced attorney. Mr. Lutzky has over 30 years of experience practicing law in New York and he offers free in office consultations. To learn more about the bankruptcy process and to determine if bankruptcy is right for you, schedule a confidential consultation by calling 718-329-9500. It’s time to become debt-free. Visit us on the web at www.MyNewYorkCityLawyer.com.