What does it mean to file for bankruptcy?
When a person declares themselves bankrupt they no longer have to pay all their debts like credit cards and car loans.  Some debts must still be paid, such as child support, some Centrelink debts, and driving fines from the State Debt Recovery Office.

How many years does it stay on your record once you declare yourself bankrupt and what other implications are there for your finances?
Bankruptcy lasts for three years.  It stays on your credit file for seven years.  It's a matter of public record forever.  If you're asked the question in future if you are now or have ever been bankrupt, you have to say yes.

When you reach a certain amount of debt, is the answer to go bankrupt?
It's not always the answer to declare yourself bankrupt when you're in debt and it depends very much on individual circumstances.  It depends on the amount of debt, your level of income and a variety of other factors. It's important to get advice for your individual circumstances.

More information
Wesley Mission national financial counselling hotline 1800 647 409.
Australian Financial Counselling and Credit Reform Association is a good one stop shop for debt info.
Australian Government Insolvency and Trustee Service