Bankruptcy is a major step for most people. Bankruptcy law is intended to protect people from their creditors when they become unable to pay their bills. The roots of bankruptcy law probably go back to the Hebrew tradition of forgiving all debts every 7th year. In the U.S., people have often felt that bankruptcy was a "black mark" on their morals or credibility. However, in the recent economic recession, people are seeking bankruptcy protection all over the country. Bankruptcy is intended to give a person a fresh start, and generally eliminates all debts other than those that are non-dischargeable (student loans). Bankruptcy can be done on a DIY basis or by using an attorney. Attorneys in most states charge less than $1K for a basic personal bankruptcy, and they usually accept installments. Also, many states allow paralegals to do this by filling out forms for you and then they let you file the forms on your own.
Our "all bankruptcy" resource list is here: Bankruptcy Law Free Legal Resources
For really useful resources that cost just a little bit, but could save you thousands, consider these:
Generally, bankruptcy allows you to keep a vehicle valued under a certain dollar value or to affirm your auto loan and keep the car if the equity in the car is not above the same value. You can affirm some debts as well. There is rather significant hit to your credit and you will not have an easy time finding loans for the few years after you file. However, most people who have filed bankruptcy are glad for the fresh start and they are able to bounce back in a couple of years to a place where they are once again productive.
We also offer a resource to help stop creditor collection harassment.