Why don't your brother foreclose on the house before filing bankruptcy. The two are mutually exclusive. Also it might be enough for the bank to write off the loan and repossess the house for auction or short sale. They can possibly come for you on the difference between loan and sales but I think it varies by state. Like in California, it is a non-recourse state so once the house is sold the lender can't come after you or your brother for the difference if the sales price is lower than the debt owed. However if you live in a recourse state then the banks can come after you, but I think they have to go to court for that.
At any rate, I'm assuming you are not only the co-owner on the house but also the co-owner of the mortgage. If so, my guess would be that it would hurt your credit score. I mean you both essentially own the loan and failure to pay = bad ratings and it will probably be reported on your credit score if you foreclose.
If you are looking to remove your brother from the deed and transfer to mortgage under you, I think you can do that. you probably need to requalify for the loan and refinance.
Good luck.