Detroit in bankruptcy proves that no one is safe from financial crisis. The city struggled with debt for years before finally succumbing to chapter 9 protection. Detroit is a big city however there are many things that individuals can take from the situation to help them avoid a personal financial crisis.
City of Detroit: What Went Wrong
Borrowing To Pay Bills – Detroit spent years paying bills by borrowing money. If you can’t pay your bills don’t make this mistake, it will only put you farther in debt.
Cutting Back Necessities To Save – When Detroit fell into debt it cut way back on the basic services for residents which has put pension benefits in jeopardy for many retired city employees. If you are deciding where to cut back on expenses start with luxuries you can live without. Many debtors will try to continue to lunch with friends and participate in other recreational spending habits in order to hide their financial stresses.
Banking On A Single Asset – Some believe that part Detroit’s problem was the demise of the automobile industry. It was such a major part of their industry and employment structure that they couldn't survive the downfall. Individuals can’t be confident in their job security without broadening and sharpening their skills. Go back to school or obtain new certifications that increase the value you bring to current and potential employers. This will make it easier to get hired if you lose your current job.
Give Creditors a Reason to Trust You – Detroit got itself it in a position where their financial issues were obvious. City residents began racing to the suburbs, leaving the city with 1 million less residents than they had in 1950. As an individual debtor you want to be honest about your financial issues and communicate to creditors that you have the situation under control and you intend to fix things. Determination to succeed is a great first step at solving your debt problems.
If you are struggling financially your first steps are very important.Chang & Carlin offers all clients a FREE Bankruptcy Consultation.This gives you the opportunity to receive guidance from a trusted professional without spending any money. They will help you determine the best course of action for your situation.
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Get The Facts:
Did You Know?
- In 1960 Detroit had the highest per-capita income in the nation while today, 47% of residents are functionally illiterate.
- In 1950, Detroit had 300,000 manufacturing jobs compared to 27,000 today.
- Right now there are 78,000 abandoned homes in Detroit and you can buy a house for less than $500.
*Facts from zerohedge.com
The article above appeared in the Suburban Legal Group "Debt, Mortgage, Bankruptcy, Foreclosure Newsletter". Issue – 28 | August 2013