Bankruptcy may be filed for almost any debt, including debts owed to private lenders--while there are a few debts which, under law, cannot be discharged by bankruptcy, those do not seem to apply here. The debts which cannot be discharged are ones such as tax debts; child support and alimony; federal guaranteed or provided student loans; or from court judgments from lawsuits over injuries or damage caused while DUI.However, while bankruptcy can be filed over a debt owed to a private lender, it may not help your situation as much as you'd hope: bankruptcy does  not end or eliminate a security interest in property. Therefore, if the debt is not paid, the lender may still foreclose on the family property. What the bankruptcy will do is temporarily stop foreclosure actions--which can give you more time to work through the situation--and will prevent the lender suing you for repayment--but  the lender will still ultimately be able to take any property which was collateral for a loan.