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Stockton in California has earned the dubious distinction of becoming the largest city in America to enter bankruptcy. The cause of this misfortune was the housing bubble burst. Stockton is home to nearly 300,000 residents who had borrowed a huge amount of money in the early 2000s since they were expecting huge returns from property tax revenues and long-term developers’ fees. However, all of this was lost because of extensive foreclosure across the city in the mid-2000s. This resulted in a 70% decrease in the tax base of the city.
Los Angeles based bankruptcy law firm Recovery Law Group elaborates that Stockton owes a staggering $900 million debt to California Public Employees Retirement System (CalPERS). They, however, ensured that the pensioners didn’t suffer. Stockton neglected all other debts but stayed current on the pension payments. However, the bankruptcy judge left open the possibility of renegotiating the city’s obligation to CalPERS. This has come as a rude shock to the residents of Stockton who were relying on their government to help them in bad financial times.
In case you find yourself in a financial mess, do not hesitate to call 888-297-6023 to schedule an appointment with best bankruptcy attorneys California for consultation on your case.