How does personal bankruptcy work?

Based on your income, you should be eligible to file Chapter 7 bankruptcy.  Chapter 7 is straight liquidation which eliminates certain types of debts such as the credit cards. 

On the bankruptcy schedules (forms), you list all your creditors, account numbers and the amount of each balance and the month and year the debt was incurred.  You also list your income and expenses.  If there are any debts you want to reaffirm (continue paying), you indicate that on the bankruptcy forms.  You also list exemptions (exempt property and the amount for each category).  Categories would include clothing, cars, books, house, etc.  You can select either the federal exemptions or the state exemptions.  You cannot combine them.  You have to use only the federal exemptions  or only the state exemptions depending on which has the largest exemption amounts for your particular situation.  Your exempt items are either all federal exemptions or all state exemptions.

File your bankruptcy schedules with the U.S. Bankruptcy Court which has jurisdiction for your area of the state.  Your bankruptcy takes effect immediately upon being filed.  There is a court filing fee.  The bankruptcy court sends notices to your creditors that you filed bankruptcy.  This is why it is important to list all creditors (names and addresses) with whom your account has a balance.  The court will then schedule a hearing before a trustee.  After that hearing, your bankruptcy will be discharged on a date set by the trustee, which means no creditors can raise objections to it after discharge.

You and your husband should both file bankruptcy because if your husband doesn't file, your creditors could go after him.