Bankruptcy can make a huge difference if you are over your head in debt. Bankruptcy can be the difference between keeping your house and the equity in it and losing it all. Bankruptcy can keep you from having your wages and bank accounts garnished by creditors (depending on collection laws in your jurisdiction). Chapter 7 is liquidation. You sell virtually everything you own and your creditors divide it up to satisfy all your debts (except student loans and tax liens). It is the most effective way to go through personal bankruptcy because you do not have to have the bankruptcy court hanging over your head for years and you really get a fresh start. Of course, it is very difficult for families because you may have to sell playstations, TVs, computers, etc. Chapter 13 is reorganization. You will reach an agreement with your creditors to basically renegotiate your debts in exchange for you being on a very tight budget under the supervision of the bankruptcy court (trustee). Once you emerge from performing the plan, you will not be debt free. But chap 13 is how people save their houses and cars from foreclosure/repo, which has a tremendous benefit in not losing equity and having to go out into the credit shark market (buy here pay here auto lending and scummy apartments who take credit risk tenants).
Negotiating with your credits outside of bankruptcy has tax implications and is very difficult. People who charge for doing it tend to be shysters. The best thing you can try is to go to your creditors and ask for forbearance. There are generally no tax implications as your creditor is just putting your debt on hold. It is short term usually, but can give you a chance to get current on other debts before everything falls apart.
Getting credit after bankruptcy is just about impossible for 2 years. After that, you will basically be starting from scratch on your credit and it will take about another 5 years of excellent credit performance to get out of the sub-prime market.