Detroit free of bankruptcy

Three years after emerging from bankruptcy, the City of Detroit has been released from state financial oversight. Detroit’s bankruptcy was the largest municipal bankruptcy in history.

Detroit posted balanced budgets and surpluses for each of the last three years which was a key factor in the decision by Michigan’s Financial Review Commission (FRC) to free Detroit from oversight.

“For the first time in four decades, Detroit’s elected leadership will be in complete control of government functions,” Mayor Mike Duggan said in a statement

The statement also said,

The FRC will continue to exist for a 10-year term, although it will play no active role in City of Detroit operations. The city will be required to submit monthly financial reports, and will also submit its adopted budget and 4-Year Financial Plan each year. So long as the city continues to balance its budgets and meet other basic fiscal requirements, the FRC will stay inactive for the rest of its existence.

According to the, the Michigan Chronicle, the city has always been under some form of federal or state oversight since 1977.

“That includes 36 years of federal court oversight of the Water & Sewerage Department for environmental issues, a decade of U.S. Justice Department oversight of the police department over use-of-force and lockup conditions, and a decade of U.S. Housing and Urban Development control of the Detroit Housing Commission due to poor performance,” the Metro Times writes.

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Cancer increases bankruptcy risk, even if you have insurance

A new study by the Hutchinson Institute for Cancer Outcomes Research in Seattle has found that even though the may have insurance, those suffering from cancer may face bankruptcy .

According to the lead researcher, Scott Ramsey, M.D., Ph.D.

Bankruptcy may represent a unique and heretofore unstudied potential source of health disparity.  In this study, we formed a novel partnership with the Federal Bankruptcy Court and the National Cancer Institute’s SEER cancer registry to link bankruptcy records for cancer patients and a matched control population without cancer.  Our findings indicate that  that cancer patients experience excess rates of bankruptcy compared to persons without cancer, results that have potentially important implications for those researching the causes of cancer disparity, and for policymakers seeking to mitigate the economic as well as clinical burden of persons with cancer.

The researchers found that out of 197,840 people with cancer, 4,408 of those diagnosed between 1995 and 2009 filed for bankruptcy, compared to 2,291 of those without cancer.

Read more at 

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Chapter 7 Bankruptcy and Student Loans


In 2015, 13 senators of the 144th Congress (2015-17) co-sponsored the “Fairness for Struggling Students Act of 2015.”, which was the latest in a series of legislative attempts to get the Bill passed. Unfortunately, the Bill died in the previous Congress, which concluded on 3-January 2017.

Similar Bills were previously introduced, under the same title, in 2010, 2011 and 2013. To become law, a bill must be passed by both the House and Senate, and then be signed by the President.

The main purpose of this piece of legislation was to restore the ability for debtors filing for Chapter 7 bankruptcy to discharge private student loans.

This Bill tried to reverse a 2005 Law that made all students loans non-dischargeable in Chapter 7 bankruptcy except in cases of extreme hardship. The 2005 law was intended to safe guard federal investments in higher education, but that bill included private bank loans as well as federally insured loans.

In 2010, Student loan debt was over $1 trillion, more than the credit card debt. Even the 56% of graduates who found jobs, cannot handle the heavy burden of repayment of the average debt of $24,000.00 per graduate.

These student loan Bills have always been stalled in committee, and without strong encouragement from constituents, Republicans and Democrats, even future Bills will not pass.  E-mail or call your congressperson today.

For more information email me at or call me at 212-693-3737 for Free Consultation

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Is Syracuse the next Detroit?

The Albany Times Union is reporting that the pressures that caused Detroit to go into bankruptcy also exist here in New York State due to “stagnant or shrinking tax base caused by declining population and de-industrialization as well as swelling legacy costs for pensions and health care for retirees.”

…the state constitution sets limits on the amount of debt a given municipality can carry. According to data from DiNapoli’s office, Syracuse had reached 53 percent of its limit as of 2011; Albany was at 33 percent, Schenectady at 42 percent and Troy, which was under a control board in the 1990s, at 2.77 percent.

Peter Baynes, executive director of the New York Conference of Mayors noted that the trouble of Detroit are “prevalent” in New York, and many cities are on a “glide path” to bankruptcy.

Read more: Is Detroit bankruptcy prelude to upstate crisis?

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Frequently, clients want to know if they can keep their car when they file a bankruptcy. Under chapter 13, generally, a debtor can hold on to all their assets. Retaining assets is only an issue under Chapter 7 Bankruptcy.

As stated previously, the law provides a list of “exemptions” that allows a debtor to hold on to various assets when he files. In January 2011, the law changed to increase the vehicle exemption from $2500 to $4,000. This means that if your car is worth $4,000 or less, your car is protected from creditors. If your car is worth $20,000, but you have a note for $16,000 on the car, you can keep your car because your equity is only $4,000.

Now, if you owe more than the car is worth, there is another attractive option. When you file Chapter 7 Bankruptcy, you may apply for the refinance of your car under the 722 program. If you have enough income to cover the loan payments, you can get a loan modification for the book value of the car and the bank will reduce the total amount you owe and dramatically reduce your monthly car payments.

For more information email me at or call me at 212-693-3737 for Free Consultation

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