Bankruptcy is not an option that you should just go for without giving it a much thought and also as a last ditch effort.
The 6 types of bankruptcy are:
Chapter 7 – Usually for personal cases and is a complete liquidation
Chapter 9 - Municipal bankruptcy
Chapter 11 – Primarily used for business reorganization
Chapter 12 - For farmers or fishermen
Chapter 13 - For people with regular income with special payment plans for repayments which may not be as high as their normal payment but are still repaying their debts.
Chapter 14 - Moral bankruptcy
Chapter 15 - International cases
Chapter 7 is the most common bankruptcy for individuals. Here the person hands over all of their property to a bankruptcy person who then sells it and uses the money from the sale to pay the lenders. The person now is not liable for this debt and need not repay it, but then they forfeit the property too. In case of fraudulent cases like fraud or concealing property or records, they may not be freed from the debts they own. The person still has to keep on paying child support and taxes. They need not hand over the necessary household items or clothes. They can apply for bankruptcy only after a time period of 8 years.
In Chapter 13 the person can continue holding all the property but must give a part of their earnings towards loan repayment over a certain period. The amount they pay is based on various factors and this includes the income presently earned by the person.