Possible Hartford Bankruptcy Joins Growing List of U.S. City Bankruptcies

Be prepared warning sign on concrete wall with copy space.

Another City Edges Closer to Defaulting

A City of Hartford bankruptcy has become more likely, as municipal defaulting in the United States becomes more common.

Law firms have been submitting proposals at the request of city officials regarding Chapter 9 bankruptcy in anticipation of being low on cash in the city’s budget.

Hartford Mayor Luke Bronin said during the budget release in April that he was “not in a position to rule anything out,” leaving the door open for a potential Hartford bankruptcy.

The city faces a $65.0-million deficit next year on top of coming up $14.0 million short this year. While budget cuts and renegotiating with unions has helped ease the city’s burden, Hartford is still in need of $40.0 million by way of state aid if it is to close next year’s budget gap. For now, the city relies on short-term borrowing to cover immediate expenses like making payroll this year.


The majority of Hartford’s population is either in the low-income or lower-middle-class brackets. With 43.2% earning less than $25,000 a year, and a further 25.9% of residents living in a household with wages between $25,000 and $50,000 per year, Hartford has had difficulty earning enough through tax revenue and other streams in order to offset costs.

Other American Cities Facing the Possibility of Bankruptcy

Cities are increasingly facing bankruptcy as an option as industries that once held up these municipalities fall into disarray.

Detroit is perhaps the most well-known example; its July 2013 bankruptcy was the largest municipal bankruptcy filing by debt in U.S. history. The city was left with $20.0 billion of debt due to decades of mismanagement coupled with the flagging American automotive manufacturing sector.

Other factors that have contributed to the inability for cities to balance their budgets, include the closures of large employer centers like malls, large retail stores, and manufacturing.

The most hurt by these closures are lower-income households. This usually hurts the city as a whole, lessening money and investment coming in, which drives out higher-income residents and the higher-educated. This results in a cycle where the city is often trapped, forced to eventually find a way out of its budgetary woes, sometimes necessitating bankruptcy.


Hartford Moves Closer to Bankruptcy, Soliciting Proposals From Law Firms,” Hartford Courant, May 9, 2017.

Hartford latest U.S. city on the brink of bankruptcy,” Fox News, May 22, 2017.