A source close to the financial imbroglio in America’s Favorite Playground says that a Chapter 9 bankruptcy is “inevitable,” adding that the city “should have filed bankruptcy a year and a half ago.”
The official report from the state-appointed emergency management committee stopped short of this declaration, instead calling for a layoff of up to 30 percent of the city’s workers, pension cuts and debt deferrals that would save the beleaguered city an estimated $10 million this year. But with Atlantic City facing a projected $101 million budget shortfall in the upcoming fiscal year, it seems unlikely that even drastic budget cuts could turn around the city’s financial outlook. Emergency Manager Kevin Lavin admitted that the situation was much worse than the team originally anticipated. In addition to the anticipated shortfall, Atlantic City is already $397 million in debt.
Four of the largest casinos in the city have closed in the last year; as a result, the city’s tax base is about half of its 2010 level.
When Is Bankruptcy Inevitable?
If you are having money problems, consider speaking with a bankruptcy attorney. By holding out hope that nickel-and-dime budget cuts and extra few dollars will somehow turn things around, you are making the situation worse and putting yourself, and your family, through needless stress.
Specifically, look for the following warning signs as you contemplate filing a voluntary petition:
- $10,000: Every family is different, but as a rule of thumb, if you owe more than $10,000 in credit cards, medical bills and delinquent payments, it will be very difficult to negotiate with creditors and repay that amount.
- 90 Days: If you are more than two or three months behind on your house payments or car note, the lenders will attempt to repossess the collateral, despite any verbal assurances they make.
Chapter 7 can eliminate most unsecured debts in as little as a few months, while Chapter 13 debtors can repay debts over time under the protection of the federal government.
Contact John Hargrave and Associates
We have provided comprehensive counsel to individuals in and around Barrington, New Jersey, since 1977. To schedule a free initial consultation, contact our office by e-mail or call us at 856-547-6500.