UK's second-largest city Birmingham issued a 114 notice, putting a stop to all but essential spending and becoming the latest in a string of councils to plunge into financial distress.
A Section 114 notice is issued by a council when it believes its income will not be able to meet spending.
One of the key reasons behind the city going bankrupt is the equal pay claim.
The City Council doesn't have enough money to pay 760 million pounds ($955 million) in equal pay claims it owes to female government employees who were paid less than men in the past.
In June, the council revealed it had paid out 1.1 billion pounds to female workers but still had a current liability of 650-750 million pounds.
The city now expects to have a deficit of 87 million pounds for the 2023-24 financial year.
The council has also blamed the expenses of a new cloud-based IT system by Oracle and years of funding cuts by successive Tory governments for its financial troubles.
The IT system was supposed to cost 19 million pounds, but after 3 years of delays in getting it in place and problems once it was installed mean it is now expected to cost 100 million pounds.
Further, inflation, rising demand for adult social care, and ''dramatic reductions'' in income from business taxes are being touted as the reasons behind the crisis.