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There are two kinds of bankruptcy, Chapter 7 and Chapter 13.
In Chapter 7 Bankruptcy, the court appoints a trustee to sell off most of your assets and uses that to pay off your debts. Once this is done your debts are considered canceled and you no longer owe anything to the creditors. However it will still show on your credit report for 10 years, and it is becoming harder and harder to qualify for Chapter 7. Much more common is to file Chapter 13 Bankruptcy.
In Chapter 13 Bankruptcy the banks simply tell borrowers that they must pay back some or all of their debts to all unsecured lenders. Repayments under Chapter 13 are based on the ability of the debtor to pay as well as a number of other factors. Repayment periods are 3 years (for those who earn below the median income) or 5 years (for those above), under court mandated budgets that follow IRS guidelines, and the penalties for failure are more severe.
Basically you will end up paying most or all of your debt, under more threat and stress of not making a payment. Your bankruptcy will appear on your credit report for 7 years, in fact, creditors could still ask about it for many years after. For more information click here