TODAY   |  July 19, 2013

Detroit becomes largest city to file for bankruptcy

In a bold admission that an iconic city can no longer pay its debts estimated at $18 billion, the Motor City filed for bankruptcy. NBC’s Gabe Gutierrez reports.

Share This:

This content comes from Closed Captioning that was broadcast along with this program.

>> of uncertainty in detroit this morning one day after it became the biggest u.s. city ever to file for bankruptcy. gabe gutierrez is there with the story. good morning.

>> good morning. the auto giant emerged from it's own bankruptcy not long ago. now a major blow to it's home turf. many people saw this coming but it still hurts.

>> reporter: today the mayor of detroit is trying to reassure the motor city after the largest municipal bankruptcy filing in u.s. history . a bold admission that an iconic city can no longer pay it's debts estimated at $18 billion.

>> this was a difficult and painful decision but there's no other viable option.

>> reporter: detroit , the home of the american auto industry had been in financial decline for decades. the population plummeted from about 2 million in the 1950s to just 700,000 today.

>> what's eating up the city's budget are all the promises to retirees policemen, firemen, city workers, many of whom are retired now but still entitled to collect money.

>> reporter: now it's up to a federal bankruptcy judge to decide what will happen to all the debt.

>> the people in detroit are afraid. we don't know what's going to happen.

>> reporter: cynthia is a retired police lieutenant. she worries she will lose her pension as she faces mounting medical bills.

>> my husband and i have no source of income coming in because we're both retired police from the city of detroit . we would lose everything.

>> reporter: for now, officials say no city services will be impacted. this chapter 9 bankruptcy case could drag on for years and will no doubt be widely watched by many municipalities across the country dealing with their own pension problems, matt.

>>> all right. gabe gutierrez for us this morning. thank you.