That comment displays a rather shocking ignorance of the intent behind bankruptcy laws. When a private company is insolvent it's almost always better for the creditors, employees, and other stakeholders to work things out in reorganization rather than liquidating. Removing the option to reorganize would increase the cost of capital, reduce economic growth, and increase unemployment.

While municipal corporations can dissolve, that wouldn't solve anything. County and state governments can't afford to pick up pension obligations on behalf of cities. And we'll probably find that some entire states such as Illinois can't pay their pensions. There's no way for a whole state to simply stop existing.