what does bankruptcy mean anyway?
Bankruptcy for a city is basically like one for a business. They ask a judge to allow them to continue to function in a basic way with remaining funds, hold off creditors while they try to sell and divide up remaining assets, or raise taxes, to satisfy creditors as much as is possible.
NY City was hours from bankruptcy. Here is a good article describing those two days in 1975.
Kudos to President Ford for telling them NO.
https://www.newyorker.com/news/news-desk/the-night-new-york-saved-itself-from-bankruptcy