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A look at the next steps for Detroit


July 19. 2013 3:57AM
Associated Press



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(AP) Detroit became the largest U.S. city to file for bankruptcy, raising a flurry of questions about what happens next. Here's a look at what's known about the next steps:


WILL THE LIGHTS GO OUT?


The city's emergency manager, Kevyn Orr, says the city will be open and bills will be paid. And it can do things like keep police on the streets, firefighters on duty and water running. The question is whether these services will be cut later.


HOW LONG WILL IT TAKE?


Detroit is by far the largest city to file for municipal bankruptcy, and because it is, the timeframe for the case isn't known. It could take years to resolve.


WHAT HAPPENS IN COURT?


A bankruptcy judge will be appointed to oversee the case. The city will have to come forward with a list of its creditors and how much it owes them. That wasn't included in the initial Chapter 9 filing. It will also have to prove that it can't pay its bills. Orr has said previously that the city wasn't going to pay some of its debt.


A judge also will likely stay lawsuits against the city. Bankruptcy could change pension and retiree benefits, which are guaranteed under state law.


WHAT WILL THE JUDGE DO?


If the bankruptcy filing is approved, city assets could be liquidated to satisfy demands for payment. The city would propose a reorganization plan. The wide-ranging plan could include anything from selling assets, layoffs, changing union contracts and more. Then, the city would need the support of creditors to emerge from bankruptcy.


Associated Press


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