California: City of Atwater Declares Fiscal Emergency

(Reuters) - The city council of Atwater, California approved a fiscal emergency declaration on Wednesday night, a move that could put the city of 28,000 on the path to becoming the fourth city in the most populous U.S. state to declare bankruptcy this year.

California requires its local governments to try to enter talks with their creditors to avert bankruptcy filings, but municipalities may declare fiscal emergencies to circumvent the law and file for bankruptcy.

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When I first moved to California seven years ago I lived in Atwater. It was a nice smaller sized city that was, like most of the central valley, about to get buried by the real estate crash. In 2005-2006 which was when I lived there, houses were being sold for near a half million dollars that you can get now for under $200k.