Detroit's deficit is $18 billion dollars, $11 billion is unsecured including the pensions and retiree health care for 30,000 Detroit City employees.
Orr is a bankruptcy attorney who resigned from The Jones Day Law Firm in March to become Emergency Manager. Governor Rick Snyder had said he does not like the bankruptcy option but it is a tool to get Detroit back on track.
Reactions have been mixed among Detroit residents hearing about the news.
"I think bankruptcy is needed in order to organize the city again," said Detroit resident Ulysses Williams, a recent retiree, "Hopefully they can take care of the pensions. Hope they sit down at the table and negotiate this the proper way."
"This is about obtaining Belle Isle, obtaining the pension money, and then throw it in the dust." said Victor Griffin, who believes Orr came into his role with a preset agenda.
"For the past six months, we saw the city of Detroit was coming back heavily." said downtown business owner Marwan Hachem, "And now suddenly the city bankrupts, so I don't know what kind of effect it will have on our business yet. The news is still fresh."
"God bless Detroit." said Griffin, "We're gonna be alright. We're gonna fight through this."