Consumers aren’t the only ones being affected by high debt loads, some communities are also left scrambling to find a way to pay their debt. An article appeared last week on CNNMOney.com that discusses three American communities that may default on their debt – Detroit, MI, Jefferson County, AL and Harrisburg, PA.
Detroit, Michigan
With the near collapse of the American auto industry, Detroit was hit hard. Although Ford is doing great and GM and Chrysler are bouncing back, the city is not faring so well. According to the article, Detroit is on the verge of filing for bankruptcy but a recent municipal note sale staved off the immediate threat.
Jefferson County, Alabama
Kind of like the adjustable rate mortgage crisis, Jefferson County, Alabama is dealing with a floating-rate bond market. A Chapter 9 bankruptcy is looming for the state’s most populous county.
Harrisburg, Pennsylvania
Harrisburg is the capital of Pennsylvania. With a $65 million annual budget, the city is $3 million short to pay the $68 million in bond interest payments due this year. I wonder if city managers can get an extra job delivering pizzas?
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