Detroit's bankruptcy filing in July 2013 arose from decades of economic decline, population loss, and mismanagement. Once a booming industrial hub, the city faced significant challenges due to deindustrialization and the auto industry's collapse, resulting in drastic reductions in the tax base. As a result of these economic hardships, city services deteriorated, crime rates escalated, and a significant part of the population fled to surrounding areas. By 2013, Detroit's debt had soared to around $20 billion, compelling the state of Michigan to step in with an emergency manager to address the financial crisis.

The filing marked the largest municipal bankruptcy in U.S. history, placing Detroit's financial obligations under the scrutiny of federal bankruptcy courts. Emergency Manager Kevyn Orr's strategy aimed to restructure the city's debt, negotiate with creditors, and tackle unfunded pension liabilities while trying to preserve essential city services. This unprecedented chapter 9 bankruptcy would set a new precedent in how municipalities manage severe financial distress and negotiate with creditors, fundamentally changing the landscape of municipal finance in the United States.

The bankruptcy proceedings led to intense debates about the future of public services, pensions, and the potential for a revitalization plan for Detroit. Creditors, including pension funds and bondholders, sought repayment, while the city's residents grappled with the potential loss of services and benefits. Amid these challenges, Detroit aimed to rise from the brink of financial collapse and work toward revitalization, a task that drew national attention and concern regarding the implications for other cities facing similar financial woes.