Providence Mayor warns that bankruptcy looms amid financial crisis

Providence, RI- Mayor Angel Taveras warned that the city was close to going bankruptcy in June if they cannot cut their deficit.

Traveras, a Democrat, said that the city cannot afford the annual raise on retiree benefits; about 600 people receive a 5 to 6 percent increase in benefits annually. He further stated that the benefits would be cut either voluntarily or by court action.

Traveras managed to cut the budget deficit from $110 million to $30 million in the current fiscal year. Despite the cuts Providence will run out of money by June.

The mayor is also calling on non-profits, hospitals and universities, to help the city in lieu of the taxes they are exempt from.  Travers said he would support legislation that would require non-profits to pay property taxes on land and buildings that are not used for educational or medical related purposes.

Should Providence be forced to file for bankruptcy, the effects would have a ripple effect throughout the state.

Municipalities and businesses alike have been adversely affected by the struggling economy. In some instances their only hope for survival is to turn to bankruptcy attorneys to offer solutions.

A bankruptcy attorney can evaluate the troubled businesses’ finances and determine if bankruptcy can effectively reduce their debts and return to profitability or a balanced sheet.

Bankruptcy lawyers can shield the business from their creditors and suggest the bankruptcy structure that will work best for their needs.