What happens to a bankrupt city?

[tamias6]

I just read a post that made the remark of about a city going into receivership. What exactly happens to a city esp. a large one if it sinks to such a low level that it goes bankrupt and goes into receivership. I know this happened to NYC back in the 70's. If bankruptcy happens to normal John Doe his assets can be liquidated as part of the settlement process. But I can't see liquadating city services like schools, or police or putting city govenment out of bussiness. So What happens?

[RustTown]

Bankruptcy and receivership aren't interchangeable words. Receivership is an option/choice a state can take to get a city out of bankruptcy. BTW, to see receivership a work, you need look no futher than Highland Park and Hamtramck right here in Michigan in which each municipal government was dissolved or made nearly useless, and the state appointed an emergency manager to handle the day-to-day operations of the city to bring the cities out of bankruptcy. Hamtramck is out of receivership, and Highland Park is still under receivership (since 2002).

[fivedayrental]

Waterbury,CT became bankrupt a few years back. The state came in and mangaged all of the money and it is starting to climb out of the whole by having a very high property tax rate. A nice new home will cost about $240,000 in Waterbury (would go for about $375,000 in the burbs) but taxes will be about $7,000 a year for poor schools and a high overall crime rate.

[Jerseyman4]

Camden is broke, thats the only NJ city that i know of. Pretty soon, the whole state will be bankrupt unless Gov. Corzine can prove people wrong on his plans to get the state out of debt.

[thedevil]

It's so very sad to see N.J. in the state that it is in.

No, seriously though. The schools are rated as some of the best in the country. I bet that this surprised many people.

But there are so many chemcials in the air and ground that you turn this color after living there for so long:

[Spartan]

There is a small town in Spartanburg County, SC called Chesnee that is having some financial problems, and bankruptcy may be on the table soon. One of their options is unincorporating. Of course, with a large city, especially one that isn't a suburb, unincorporation isn't an option.

[CtownMikey]

the state takes over

[MZT]

San Juan Bautista, California almost went bust sometime in the early 1990s I think. They shut down their own police department to save money. (The county stepped in.)

[Captain Worley]

There is a small town in Spartanburg County, SC called Chesnee that is having some financial problems, and bankruptcy may be on the table soon. One of their options is unincorporating. Of course, with a large city, especially one that isn't a suburb, unincorporation isn't an option.

[Michi]

Bankruptcy and receivership aren't interchangeable words. Receivership is an option/choice a state can take to get a city out of bankruptcy. BTW, to see receivership a work, you need look no futher than Highland Park and Hamtramck right here in Michigan in which each municipal government was dissolved or made nearly useless, and the state appointed an emergency manager to handle the day-to-day operations of the city to bring the cities out of bankruptcy. Hamtramck is out of receivership, and Highland Park is still under receivership (since 2002).

[tamias6]

Has there ever been a case where a city going into receivership has failed to pull it out of the brink? Maybe failure has happened to tiny towns with populations under a thousand or so people so this question is aimed for cities of a few thousand people or greater.

[skylinefan]

This is an article I found on the web from Boston.Com about the Bankruptcy of Chelsea, Massachusetts one of the more famous bankrupt cities in the US.

http://www.boston.com/realestate/communiti...02/chelsea.html

[SmellyCat]

I just read a post that made the remark of about a city going into receivership. What exactly happens to a city esp. a large one if it sinks to such a low level that it goes bankrupt and goes into receivership. I know this happened to NYC back in the 70's. If bankruptcy happens to normal John Doe his assets can be liquidated as part of the settlement process. But I can't see liquadating city services like schools, or police or putting city govenment out of bussiness. So What happens?

[dtown]

ive see pics of Grand Central Terminal in the 70's...nasty! It has so much nicotine build up on the ceiling that it was yellow!

[RustTown]

Has there ever been a case where a city going into receivership has failed to pull it out of the brink? Maybe failure has happened to tiny towns with populations under a thousand or so people so this question is aimed for cities of a few thousand people or greater.

[MZT]

Several small towns in NC have lost their charters over the years, because they failed to meet the minimum requirements of city services. It's not a headline grabbing thing, people still live there but the area just becomes a denser unincorporated part of the county.

I think there are also examples of towns that re-incorporated, after they became more politically motivated to maintain their charters. (Stokesdale?)

If I remember correctly, there have been situations in western states where counties lost their charters, and were administered by the state legislature directly.

I can also carry this analogy a little farther. Nevada was admitted as a conditional state - it was just short of 50,000 people at the time (which the constitiution requires) and in order to admit it to the union, a congressional compormise was reached that it would only exist as a state for 20 years. During that time, it crossed the 50,000 threshold, and the problem was forgotten. But if that had not happend, we might have had a case in national history, where a state was dissolved.

[walker]

Not unlike old legacy businesses, many cities and counties have large unfunded retirement benefit obligations. Often when businesses go bankrupt -I

[AuLukey]

Not unlike old legacy businesses, many cities and counties have large unfunded retirement benefit obligations. Often when businesses go bankrupt -I

[alon504]

Ultimately I believe the state moves in and evetually, bales the city out while it controls the finances. It's nothing pretty from what I've heard. But, as for the citizens, you just keep on living like normal...you really don't notice, because all essential services are always available. It can hurt the poor, though, from what I've read (cutbacks in public financed health, etc).

[davidals]

If I remember correctly, there have been situations in western states where counties lost their charters, and were administered by the state legislature directly.

[Charlotteman]

I also distinctly remember when NYC was teeter-totting toward financial insolvancy.

I think the whole country was shocked when Pres. Ford bluntly told them to forget about a federal effort at rescuing the city. It was very very interesting at the time. Ford's stubborn stance was very unexpected.

[davidals]

I also distinctly remember when NYC was teeter-totting toward financial insolvancy.

I think the whole country was shocked when Pres. Ford bluntly told them to forget about a federal effort at rescuing the city. It was very very interesting at the time. Ford's stubborn stance was very unexpected.