Detroit is known as Motor City for its once-thriving automobile industry, but now the Packard Motor Car factory stands as a symbol of the city's slow decline.
A mass exodus has been cited as a key factor in Detroit's demise. A population that in the 1950s reached 1.8 million is struggling to stay above 700,000. The city lost a quarter of a million residents between 2000 and 2010.
It has the highest violent crime rate of any major US city, with 15,245 reported incidents in 2011.
Detroit's debt is estimated to be $18.5 billion (about £12 million). Only a third of ambulances in the city are in service, and 40% of street lights do not work.
Michigan state-appointed emergency manager Kevyn Orr said bankruptcy was the "first step toward restoring the city".