(WXYZ) - Sources tell 7 Action News that Detroit could go into bankruptcy as early as Friday.
That major step would need to be done by Detroit Emergency Manager Kevyn Orr and approved by Michigan Governor Rick Snyder.
Detroit's deficit is $18 billion dollars, $11 billion is unsecured including the pensions and retiree health care for 30,000 Detroit City employees.
Three lawsuits have been filed on behalf of the employees and their two pension systems to block a Chapter 9 bankruptcy. The cases claim cuts to public employee pensions are prevented by the Michigan Constitution.
A hearing on the cases is set for Monday in Lansing. If Detroit goes into Chapter 9 before then, the cases are stopped. Recent talks with creditors including employee groups have not been completed.
But a source says when the employees and unions sue, that could be taken as a no answer to cuts in pensions. The Emergency Manager has said a federal bankruptcy judge would have the power to impose cuts in pensions.
Orr is a bankruptcy attorney who resigned from The Jones Day Law Firm in March to become Emergency Manager. Governor Rick Snyder has said he does not like the bankruptcy option but it is a tool on the table to get Detroit back on track.