Until the last few weeks, no U.S. city over 200,000 people had ever chosen to file bankruptcy. That all changed on June 28th, when Stockton in northern California (pictured here) declared bankruptcy. Stockton has nearly 300,000 residents and its decision to file changed history.
Stockton wasn’t alone, though. Two other California cities joined it: Mammoth Lakes, CA; and – as of last night – San Bernardino, CA.
With a population of roughly 210,000, San Bernardino is the second largest U.S. city in history to declare bankruptcy next to Stockton. And all within a few weeks.
What could cause this sudden, dramatic upswing in bankruptcies? According to the city councils of these communities, the problem comes down to budgeting and cash flow. The cities’ budgets far exceeded the income they could bring in, and no amount of back-tracking could save them from the eventual financial crises that forced them into bankruptcy.
If this problem sounds familiar to you, it’s no wonder. Cities all across America, including Memphis, are struggling in similar ways. Budget shortfalls, overspending, and the recession have taken a toll on even the most financially stable communities.
But it also plays out every day in our own pocketbooks. Even with a great budget, any person could face a crisis if she were to lose her job or have an unforeseen medical problem. Add to that the stress from credit card debt or an out-of-whack budget, and bankruptcy may seem like the only way out.
Our attorneys know that bankruptcy is a very difficult decision. We respect your desire to avoid it if possible; and we’re willing to help you through the process so that you can come out prepared for a strong financial future.
We hope you’ll remember along with us that these are especially tough times: those cities in California didn’t want to declare bankruptcy any more than you do; but sometimes a fresh start is the only way to get things back on track.
If you’re considering bankruptcy because of the same reasons that Stockton and San Bernardino had to file, talk with one of our attorneys for free about what it will mean for you. You can reach us online, or give us a call at 901-327-2100.