Best Answer: Bankruptcy if you are looking to cancel debt. You must be careful though in how you do this (i.e. don't rack up unusual debt right before declaring). Talk with a lawyer that specializes in filing bankruptcy to ensure you do it properly. You will thoroughly ruin your credit for many years to come but you will also need to watch for new credit offers too. Once you file, you can't immediately file again so the credit offers know this and will look to take advantage of the situation.
If you are really looking to pay off your debt though, I recommend Consumer Credit Counseling Service (no charge to you) to assist with setting up a repayment program based on your income and ability to repay. Some credit card companies will work with CCCS
and reduce the rate and/or payment amounts. You may also be able to do this with utility companies too through CCCS. Other companies like student loans or mortgage companies may be less cooperative but it never hurts to try.
Personally I recommend the CCCS route over bankruptcy. My wife and I were in a tight spot when I first got out of college and ran up a pretty good chunk of debt. Through CCCS and careful budgeting we were able to repay everything within approximately 5 years. While we had some negative marks on our credit report, we were able to still get a decent interest rate when we purchased a car at a later date by showing that we did go through a repayment program rather than filing bankruptcy.
Good luck with your choice.