Abandoned buildings line the streets of a Detroit overcome by financial decline. (sneurgaonkar/Flickr Creative Commons)

Detroit, the city credited with giving rise to America's automobile industry, has filed for bankruptcy this Thursday according to city officials.

The city is the largest and most populous municipality to ever file for bankruptcy in U.S. history, and also holds the record for greatest amount of debt owed while declaring bankruptcy.

"This is a difficult step, but the only viable option to address a problem that has been six decades in the making," said Governor Rick Snyder.

Kevyn Orr, the "Emergency Manager" hired by the city of Detroit to handle the debt crisis, sent a letter to Gov. Snyder on Tuesday requesting approval to file bankruptcy, claiming that "based on the current facts and circumstances" there is no possible alternative to filing for bankruptcy, "because the City cannot adopt a feasible financial plan that can satisfactorily rectify the financial emergency."

Governor Snyder has expressed disapproval towards declaring bankruptcy when it was proposed before, worried that financial bankruptcy would negatively affect the credit and borrowing ability of nearby municipalities and the state of Michigan itself. 

However, after months of government cuts and ineffective negotiations attempting to reach compromises with Detroit's debt holders, Snyder had no choice but to follow Orr's recommendation to manage the crippling debt. 

Detroit's total amount of debt is estimated to be as high as 19 billion dollars. 

The city's decaying public services are the strongest indicator of Detroit's critical condition - according to a report from Emergency Manager Orr's office, nearly 40 percent of the city's street lights do not work.

Once known as "the Paris of the West," Detroit is now known for its economic decline, ineffective public services, and increasing crime rate.

In the official petition for bankruptcy, Gov. Synder explains that "the City cannot meet its basic obligations to its citizens" by covering some of the gross incompetencies of Detroit city services due to lack of funding.

If the petition is approved by the U.S. Eastern District Court of Michigan, the city of Detroit will be allowed to liquidate its assets and begin funneling money into dwindling city services such as trash management, police departments, fire departments, and public lighting.

Reach Staff Reporter Benjamin Li here: