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there are two main types of bankruptcy in the US, chapter 7 and chapter 11. In chapter 11, companies must submit a plan to the courts about how they are going to pay back debtors and 'fix" the company in exchange for some protections. In this case, the stock doesn't necessarily lose all values, but generally they are delisted and only traded over the counter, and in the vast majority of cases they are canceled and do become worthless (though not necessarily, again).
Chapter 7 means that the company is really finished, and can't come up with a plan to pay back debtors. As such, it is liquidated, and stock becomes worthless.
In the case of GM, the talk is of a chapter 11 bankruptcy. There have been a few cases where outstanding stock was not cancelled, but they are in the minority. Texaco, if I remember correctly, didnt cancel its stocks, but delta did, for example.
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