Request Appointment
(913) 856-2828

Another American city is set to go the way of Detroit if a financial solution cannot be found. Desert Hot Springs, California may enter a second round of bankruptcy proceedings after a new finance director discovered a $3 million shortfall in the city’s $13.5 million budget. City salaries and pensions are being cited as one of the major reasons.

Desert Hot Springs has a population of about 26,000 residents and is located about 100 miles east of Los Angeles. The city previously filed for bankruptcy in 2001 after landing on the losing end of a multimillion-dollar lawsuit that threatened its financial wellness. A $9.7 million bond debt still remains from that Chapter 9 filing. Finance director Amy Aguer has stated that about 70 percent of the city’s budget is dedicated to police costs. The bulk of these costs are due to salaries, as well as pension payments that are due to the California Public Employees’ Retirement System.

Desert Hot Springs is in a position that many individuals find themselves in today. New financial challenges may require that an individual revisit the option of filing for bankruptcy. In some cases a previous bankruptcy may not have addressed all the financial issues that were present.

Bankruptcy may still provide the right answer for you. The decision to file a Chapter 7 or Chapter 13 bankruptcy is dependent on the financial and legal issues that an individual may be facing. An experienced bankruptcy attorney can help guide the client to the legal option that will best meet their needs.

Source:, “Tony resort city mulls bankruptcy, blaming wages, pensions,” Tim Reid, November 13, 2013.