[Porsche-O-Phile]

I have not (and I'm not a lawyer) but here's my understanding:

1. Legislation passed about 5 years ago makes "charge offs" (Chapter 7) for individuals much harder to do now. More likely you'll be assigned a "Chapter 13" which is a restructuring agreement. Your creditors still get paid, but they get paid on the basis of a new timetable with the court as the arbiter.

2. With mortgages, you will likely be able to write off a FIRST mortgage (your state's laws may vary) but the lender can (and should) send a 1099 for the loss. You will be liable for taxes on that amount, which can be substantial. Depending on your state's laws you will likely NOT be able to discharge a second (or subsequent) mortgage or any HELOCs.

3. Yes, your credit will take a huge hit. You will be essentially living sans credit for 3-4 years. After that you can begin to rebuild in a meaningful way. Typically bankruptcy filings remain on your credit bureau reports for 10 years BUT under certain circumstances a "full history" credit report can be pulled that looks all the way back to the day you were born and creditors will see it for long after.

I recommend talking to a lawyer. There's also a wealth of information on creditboards.org. Best of luck to you.