system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: what does going bankrupt/declaring bankruptcy actually mean and what are the consequences?
gpt
In short, it's a legal filing that formally states that your debt obligations are well beyond your means and that you are seeking the assistance of the courts to either restructure debts to more manageable terms or, if necessary, discharge some debts.   

In exchange, the courts may order that any non-essential valuable possessions be sold off and the debtor pay off what can be done with what assets one has, and also typically gets a huge red flag attached to your credit history that lasts a long time.