City Bankruptcy and the future of America's economy

So I just now heard about the entire city of Detroit is bankrupt. Ya I know Im slow, but I don't really get what that even means or how something like that happens. I think its because I know next to nothing about economics. Obviously this is going to have a negative effect on many things and if this continues with other cities I worry about the future of the United States. I am hoping to hear from all of you a little about economics and what this all means as well as your thoughts on what can be and should be done in the future.