What happens when a town goes Broke?

Question

What happens to a town when it runs out of money?

If a town goes broke and goes into bankruptcy is it possible for essential services such as sewer and water to be cut off?

Answer 1

A town going broke doesn't mean that your water services or such will be cut off.

I'm not sure exactly how it works. But I believe the government somehow keeps the towns essential services going in the event the town goes bankrupt or broke.