What happens if neutral wire is disconnected?

It depends - if a single circuits' neutral is disconnected then anything downstream will not work - there is no return path for power. If it is the neutral for a milti-wire circuit (such as the neutral - and ground - connection at the main panel) then you run the risk of creating a voltage imbalance if there are any 220v devices running. That's because a 120v load is using the other hot leg as a return path - through the 220v device. Clear as mud, huh? Suffice to say it is a bad thing. I have seen many instances in which office equipment has burned up due to bad connections in a multi-wire power pole.