Detroit Bankruptcy, all of us could pay - New York News

Detroit Bankruptcy, all of us could pay

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DETROIT (WJBK) -

Leon LaBrecque, JD, CPA, CFP, CFA Managing Partner at the LJPR investment firm says everyone in Michigan could end up paying for Detroit's bankruptcy.

He spoke to Fox 2's Murray Feldman about it during a Fox 2 Newscast.

LaBrecque says the big issue is whether a bankruptcy court will allow municipal pension funds to be affected in a Chapter 9 filing.

Currently municipal pension plans are protected by the State of Michigan's Constitution. 

If the condition of payment of these funds is changed through the process of bankruptcy,  this means other cities may work to remove the pension debt from their books. 

LaBrecque says: Interest rates can rise whether EM Kevyn Orr makes a deal with secured creditors or if Detroit goes into Bankruptcy, the cost of borrowing for everyone will go up.

"This is true whether you live in West Bloomfield, Ann Arbor, Saginaw or Detroit, so now the costs for municipalities goes up and this can effect taxes for everybody in Michigan," says LaBrecque.

 

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