Detroit bankruptcy case officially closes more than 13 years after historic filing

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Detroit’s historic bankruptcy case — the largest municipalbankruptcyin U.S. history — has officially closed more than 13 years after the city first sought Chapter 9 protection amid a financial collapse that reshaped the city’s finances, pensions. long-term fiscal strategy.

U.S. Bankruptcy Judge Thomas Tucker granted thecity’s motionfor a final decree this week. formally ending the case after determining administration of the bankruptcy had been completed.

The closure marks the end of a years-long restructuring effort that eliminated roughly $7 billion in debt. restructured another $3 billion, according to the city, freeing up an estimated $150 million annually for city services.

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Mary Sheffield speaks after being sworn in as mayor at the Detroit Opera House on Jan. 9, 2026, in Detroit, Michigan.(Monica Morgan/Getty Images)

Mayor Mary Sheffield called the milestone evidence that Detroit "has its financial house in order," pointing to 12 consecutive balanced budgets. surpluses, reserve funds topping $500 million and the city’s return to investment-grade status.

The formal closure also comes as major credit-rating agencies have highlighted Detroit’s improved fiscal position.

An aerial view of downtown Detroit.(iStock)

One day before the bankruptcy case officially closed, S&P Global Ratings upgraded Detroit’s general obligation bond rating to BBB+ from BBB, citing the city’s "sustained strong financial performance. governance conditions."

Moody’s similarly said Detroit had strengthened its "financial resiliency" in recent years, citing strong reserves. improved fiscal management since emerging from bankruptcy in 2014.

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Still, both ratings agencies warned the city remains vulnerable to broader economic pressures tied to the automotive sector, inflation. long-term pension obligations.

Skyline of Detroit.(Roberto Machado Noa/LightRocket via Getty Images)

The closure came after Detroit completed a final distribution of roughly $10 million tied to accrued interest on "Class 14 B notes," financial recovery bonds issued to unsecured creditors during the restructuring.

Detroit filed for bankruptcy in July 2013 under a state-appointed emergency manager after years of population decline, shrinking tax revenues. rising pension liabilities pushed the city into insolvency.

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The city officially exited bankruptcy in late 2014 under a restructuring plan. became a national case study in municipalfinancial recovery.

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