Detroit, the home to the three largest automakers Ford, General Motors and Chrysler in the U.S., has jumped into the hot soup of bankruptcy after failing to overcome years of sagging economic growth, declination in population, high crime rate. It filed for bankruptcy on Thursday, becoming the largest city in American history to ever do so.

It's the largest municipal bankruptcy filling in the U.S. history in terms of debt, according to The New York Times' report.

"The fiscal realities confronting Detroit have been ignored for too long. I'm making this tough decision so the people of Detroit will have the basic services they deserve and so we can start to put Detroit on a solid financial footing that will allow it to grow and prosper in the future," said Michigan Gov. Rick Snyder as quoted in the USAToday report . "This is a diifficult step, but the only viable option to address a problem that has been six decades in the making."

Detroit is likely to be under a debt of $18 billion to $20 billion, The New York Times reports citing Kevyn D. Orr, Detroit's emergency manager.

The Washington Post reports that Orr had in a report enumerated all the issues that the debt-struck city with a population of 706, 000 was facing, including the decline in city's population by 26 per cent; the 18.6 per cent unofficial unemployment rate; low tax returns; years of bad governance; and the high crime rate that was driving more people out of the city.

He had indicated in June that there was a 50-50 chance that Detroit would need to file for bankruptcy at the time of his meetings with debt holders, according to ABC News.

Orr had made a call to Detroit's Mayor, David Bing, on Thursday afternoon, telling him that the decision has been made to file for Chapter 9 bankruptcy protection.

"It's a very, very difficult day for me, as I'm sure it is for a lot of our citizens in the city of Detroit," said Bing as quoted in Detroit Free Press. "When I took office over four years ago, I said Detroit was in a financial crisis. And we tried to work our way through the situation over the last four years. But it's been very, very difficult."

"The filing begins a 30- to 90-day period that will determine whether the city is eligible for Chapter 9 protection or not and define how many claimants might compete for the limited settlement resources that Detroit has to offer," according to Detroit Free Press.