Spoiler alert: We do all three.
Chametz (which includes all leavened products ranging from bread, cake and cookies to vodka, whiskey and beer) is a peculiar Torah prohibition. On one hand it is more lenient, being a limited restriction which applies only 8.5 days a year (yes, it begins late morning on the day of the first Seder) on the other hand it has two stringency that don’t apply to any other Torah prohibition: (a) not only are we forbidden to eat or enjoy benefit from it, but even ownership and possession are forbidden (2) even the smallest minutest amount is forbidden. It’s because of these two things that Jewish families go all out to clean up the house and remove all traces of Chametz before the holiday.
There are 3 methods in getting rid of Chametz and removing it from our ownership & possession. These are complex Talmudic issues with much richness and background and conditions, but for practical purposes we’re distilling it down right here to its simplest most practical components:
1) BITTUL (mental/verbal declaration)
This is a verbal declaration said before Passover that disowns and removes all interest from any Chametz in our possession, whether we have know of it or not. The verbal declaration to be recited on the morning before Passover begins has to be said before the time when Chametz becomes forbidden to us. Here’s the text of the nullification in English:
All leaven and anything leavened that is in my possession, whether I have seen it or not, whether I have observed it or not, whether I have removed it or not, shall be considered nullified and ownerless as the dust of the earth.
2) BEDIKAH and BIYUR (search and destroy)
Specifically, this is about the search for Chametz on the night before Passover and the burning of Chametz on the morning before the Seder. But more broadly it is about the clean-up and removal of Chametz all around the house: your backpack, crumbs in the couch, stuff that fell behind the bed, counters, cabinets, even the car. It can be very surprising where you’d find Chametz! Method #2 is very different than method #1 is that it is about physical removal.
3) MECHIRA (sale of Chametz)
If you have a full bottle of vodka or a big bag of pretzels – method #3 helps you deal with the prohibition against ownership and possession and you don’t have to throw it out. Use this online form where you designate a Rabbi as your power-of-attorney to sell your Chametz to a non-Jew on your behalf, and it is bought back after Passover. The legalities are complicated, as it has to satisfy both Jewish and secular law, so authorizing a Rabbi to do this is your best bet. On your end, you’d put the to-be-sold Chametz in a sealed-up cabinet or area, and leave it alone for all of Passover.
WE DO ALL THREE.
Jewish observance today does all three. Yes, we cleanup before Passover all around the home, office and car and get rid of the Chametz we find. We put away Chametz in a sealed area and sell it via a Rabbi. And we also recite the nullification declaration. And all these three methods are done BEFORE Passover, even before 11am-ish (depending on the year) on the morning before the first Seder night.