"It's not realistic to think that something like that could be sustained indefinitely," Cochrane said.
Today, its largest creditors are the companies that in 2007, after the economy began to contract, insured the bonds that funded the city's over-extended pension obligations.
The city's deal was risky from the start, said Jeffrey Michael, who as director of the business forecasting center at University of the Pacific has studied the city's struggles.
"It was like refinancing your house and dumping the proceeds into the Wall Street market and hoping your earnings go up faster than the interest rate on your loan," he said.
By 2009, the city began slashing its budget to stay afloat. The police department lost 25 percent of its 441 sworn officers and fire was cut by 30 percent. City staff was cut by 40 percent. The city general fund budget, now $155 million, has been cut by $90 million over three years.
The impacts were felt everywhere. Wells Fargo seized three parking garages when the city defaulted on the $32 million in bonds that financed them. Bond holders also seized the $40 million downtown high-rise that was to become City Hall.
Stockton recorded its highest-ever number of murders in 2011 and 2012, and had three just last Sunday. Last year, an FBI analysis of violent crime made it the 10th most dangerous city in the U.S. Its unemployment rate is 17.5 percent, and it has the third-highest illiteracy rate in the country.
"We are fiscally insolvent, but service insolvent as well and that threatens our ability to attract new business, which we need to recover," Cochrane said.
Last summer, the city began negotiating with creditors, a requirement before entering Chapter 9 bankruptcy. Ten employee unions agreed to temporary wage and benefits cuts.
Retired employees have also been asked to pick up a larger share of health care premiums, closing a $540 million retiree health care cost liability.