Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What are the pros and cons of bankruptcy ?”
As the nation continues to watch Detroit struggle through its financial nightmare and begin to tackle its ongoing bankruptcy, experts say that another major municipal bankruptcy may offer hope to those in Michigan for a better future. That’s because Jefferson County, Alabama, which contains Birmingham, officially exited its bankruptcy last week.
Prior to Detroit’s recent filing, Jefferson County was the record holder for the largest municipal bankruptcy ever when it filed for protection over its $4.2 billion in debt back in November of 2011. At the time, the county was crushed under the weight of a massive debt burden with no hope of every paying it off. Since then, things in Birmingham have improved immensely, for residents and for the county’s finances.
Officials with Jefferson County say that during the course of their bankruptcy protection they were able to have $1.4 billion of debt forgiven by creditors. Though that’s great news, the county still has another $1.8 billion in new bonds that it must repay. The goal is for the county to slowly repay the debt over 40 years, gradually rebuilding its credit along the way.
While the county has improved enormously from a financial perspective, its residents have fared even better. Over the past two years, unemployment in Birmingham dropped from 8.6 percent to 6 percent and now ranks as the sixth-best rate among all large metropolitan areas. The city’s GDP also outpaced the rest of the country, growing by 2.1 percent in 2011 and 3.8 percent in 2012. That rate represents about 1.5 times the national growth rate.
Beyond these positive statistics, Birmingham has also witnessed significant investment by local companies. American Steel Pipe announced a few months ago that it would build a new $55 million facility in Birmingham. Mercedes-Benz revealed that it would hire more than 1,400 workers for its new plant located just outside Birmingham while Honda has added more than 400 workers to its facility in the area.
Though Detroit’s bankruptcy is certainly different from Jefferson County’s, the two share one important thing in common. In both instances, only one governmental entity filed for bankruptcy protection. In both instances, outsiders assumed that this would doom the entire region. The reality is that in both places there are other players in the economy that can continue growing, shoulder some of the burden and help pave the way for a comeback.
If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC today at (704) 370-2828. As professionals who are experienced in the bankruptcy arena, our attorneys will provide you with the best advice for your particular situation.