Protesters outside the courthouse during Detroit's federal bankruptcy ruling
Bill Pugliano/Getty Images

It is official: Detroit is bankrupt.

On Tuesday, a federal judge gave Detroit the OK to proceed with the largest municipal bankruptcy in history, the New York Times reports. By allowing the city to qualify for bankruptcy, Detroit can dump billions in debt. Judge Steve W. Rhodes said that city met all of the qualifications, including failing to pay debts and being unable to provide a minimum level of basic services to its 680,000 residents, the New York Times reports.

"This once proud and prosperous city can’t pay its debts," the judge said. "It’s insolvent. It’s eligible for bankruptcy. But it also has an opportunity for a fresh start."


Appeals were expected to be filed quickly, as the ruling also allowed for public pensions to be reduced during the reorganization despite a provision in Michigan’s constitution.

A spokesman for the Detroit fire and police department retirement system told the New York Times that lawyers were working on filing an appeal for the some 8,500 retirees, by the end of the week.

Detroit, once the fourth largest city in the United States, experienced a financial collapse once the auto industry, the backbone of Detroit's economy, began to crumble. According to the New York Times, the city will be allowed to search for ways to satisfy some of its financial obligations and must work to restore essential services to residents under court supervision.

Read more at the New York Times.