Jefferson County, Alabama, is filing for $US4.1 billion bankruptcy - the largest municipal bankruptcy in United States history.
The county has been struggling to avoid bankruptcy since 2008, but recent talks on a deal to restructure its debt broke down.
The county sank into debt after a costly upgrade of its sewer system.
Jefferson County has about 658,000 residents and is home to Alabama's largest city, Birmingham.
The BBC reports the bankruptcy was approved by the Jefferson County Commission by a vote of 4-1.
Harrisburg, the capital of Pennsylvania, filed for bankruptcy in October due to debts of $US300 million. Soon afterwards the state passed a law taking control of the city's finances.
In 1994, Orange County, California, filed for bankruptcy with debts of $US1.7 billion.