If you didn't catch the domestic news, Seeking to stave off a state takeover of its beleaguered budget, the city of Harrisburg, Pa., (also the state capital) filed for a rare Chapter 9 municipal bankruptcy on Wednesday. Read more The basic concepts of bankruptcy are easy to understand creditors are notified of the filing which creates an automatic STAE the bankruptcy trustee takes control of the assets exiting contracts are voided (including all labor union agreements) for businesses, there is typically a restructuring frequently business units get sold off and assets get sold creditors get a low percentage of their outstanding balances as payment-in-full This is just the tip of the iceberg, as googling will find several lists of highly probable cities on the verge of also filing. But just how does goverment, at any level, do that? What assets can a city sell off without major impact to those living there? Does the existing administration get fired?