Detroit Files For Chapter 9 Bankruptcy

By Emma Koch

July 19, 2013 Updated Jul 23, 2013 at 10:16 AM EDT

DETROIT, Mich. (www.incnow.tv) -- Michigan Governor Rick Snyder and Detroit's Emergency Manager, Kevyn Orr discussed the Motor City's Chapter 9 Bankruptcy filing announced Thursday.

Detroit is the largest city in American history to file for bankruptcy protection. City managers are working to lay out their case that Detroit is insolvent and needs to restructure its debts.

After years struggling on the brink of financial disaster, Detroit has finally acknowledged it cannot pay its bills and has $18.5 billion in liabilities.

The fate of the city is a contract to the auto industry that calls it home, which is roaring back after its own near-collapse.

Now with Detroit's bankruptcy filing, red flags are popping up about other major U.S. cities also dealing with billions in under-funded retire benefits. Chicago's credit rating downgraded because of $19 billion worth of under-funded pension liabilities.

This raises concerns because Illinois, like Michigan, is dealing with its own state-wide shortfall and is in no position to bail out the large cities.

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