Detroit is a city in ruin, subject to the fallout of an economic a-bomb. Once the fourth largest city in the US containing the iconic leaders of the automotive and music recording industries, Detroit is now the modern day equivalent of Dresden; a burned out shell of its former existence.
Having lost half of its population to a modern day exodus, Detroit is now one of the poorest, most segregated, and most uneducated cities in the country. In truth, it’s really kind of sad given its proud history.
Reeling from the financial fallout of a drastically diminished tax base, Detroit struggles to provide even minimal services to its citizens. In response, residents began to celebrate Halloween by going out on the town…and setting fire to all of its abandoned, dilapidated buildings. No, we’re not joking her folks. Apparently, it’s absolutely true.
With a budget of $1.6 billion, Detroit is looking at a deficit of over $450 million. In other words, unless the city completely redesigns its government, drastically cuts its finances, or suddenly finds a million middle class folks who want to live there, it will go literally bankrupt.
While many will not be surprised by Detroit’s financial situation, some will be surprised by the possibility of Los Angeles also facing bankruptcy. L.A. currently has a deficit of over $500 million. It’s problem, however, is slightly different then Detroit’s; rather than have a deficit as result of not enough people, L.A. has a deficit because too many people…as in too many contractually obligated, unionized employees.
L.A. has a decent economy, in as much as any city can have one during these tough times, but even a small dip in tax revenue has caused the city’s overblown payroll to come back and bite hard. As a result of entrenched employee interests, the city now struggles to find areas of its budget to cut and is staring down the barrel of a bankruptcy.
The two stories above show how changing conditions can quickly affect one’s financial situation. Washington State is facing a similar problem on many levels. The current recession has dramatically impacted the state’s tax base and Olympia is facing a 2.9 billion dollar shortfall.
Many of our friends and neighbors here in Washington are facing a similar crisis on a personal level. Washington bankruptcy filings continue to rise every month. Whether you didn’t see trouble coming, weren’t able to respond quickly enough to changing market forces, or simply got laid off, times are hard and money is short.
If you and your family find yourself coming up short every month and struggling just to pay your rent, put food on the table, keep the electricity on, and put gas in your car, it may be time to consider getting a fresh start through a Washington bankruptcy. Declaring bankruptcy is not for everyone, and there may be other viable options available.
If you qualify, however, filing a WA State bankruptcy may just be your best option. It can leave you debt free while also dramatically increasing your monthly cash flow, which will allow you to at least get by until our economy starts picking up again.