Bankruptcy in Monopoly can be best described as being out of the game. A player is considered bankrupt if they do not have enough assets to pay off a debt, whether it is to another player or The Bank.
What to Do
If a player runs out of money but still has assets that can be converted to cash (unmortgaged properties, buildings, "get out of Jail" cards, he or she should do so. Houses and hotels are sold back to the Bank at HALF the printed price, and mortgage values are HALF the printed price of property. Other options include trading with other players. It should be remembered that the trade, or sale of assets, must enable the player to TOTALLY pay off the remainder of the debt, otherwise the player is bankrupt and out of the game.
If the bankrupt player owes another player, he or she must turn over all he or she has of value and retire from the game. However, if the player owes the Bank, they must turn over all they have of value to the Bank and retire; the Bank then auctions off any property so taken (except buildings).