The city of Stockton, Calif., will decide Tuesday whether to give city leadership the authority to declare bankruptcy if the city can't reach a deal with its creditors by the end of the month.

In February, Stockton entered negotiations with creditors under a new California law that requires municipalities to hold mediations before filing for Chapter 9 bankruptcy protection. In a meeting Tuesday, Stockton's city council will vote on a resolution that would allow its city manager to declare the city bankrupt.

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The Better Business Bureau recently issued a warning to consumers regarding the misleading practices of debt settlement companies. This warning comes after receiving more than 3,500 complaints since the start of the recession in 2007. The BBB reports that many individuals paid hundreds of dollars in upfront fees to debt settlement companies, but only fell deeper into debt after the process failed.

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