Stockton, CA Files for Bankruptcy

    STOCKTON, CA - APRIL 29:  A sign advertising refinancing services is posted in a vacant lot April 29, 2008 in Stockton, California. As the nation continues to see widespread home loan foreclosures, Stockton, California led the nation with the highest foreclosure rate. One out of every 30 homes in Stockton is in foreclosure, close to seven times the national average for a metro area in the U.S.  (Photo by Justin Sullivan/Getty Images)

    Justin Sullivan / Getty Images

    Stockton, a working-class port city and epicenter of California’s agricultural exports, filed for bankruptcy on Tuesday night, becoming the largest city in the U.S. to do so. Residents of Stockton lived largely on credit during the economic boom, borrowing money to construct expensive waterfront redevelopment projects up until the mid-2000s. This caused the city to be hit hard by the depression, leading it to have the second-highest rate of foreclosures in the nation. Subsequent drastic cuts of $90 million to its police department, fire department, and employee benefits weren’t enough to bail the city out of debt. The state is investigating the possibility of corruption factoring into Stockton’s financial meltdown.

    Read it at Los Angeles Times