A BANKRUPTCY MISCONCEPTION: I often get asked about Bankruptcies affect on Mortgage liens. Many are under the impression that Bankruptcy eliminates all debt including mortgages. The truth is that Bankruptcy only eliminates an individual’s personal obligation to the debt and not the lien against property. While it is true that Bankruptcy temporarily delays the process of collection or foreclosure, it does not eliminate the lien against the property. Once a person completes Bankruptcy, the Lender’s collection efforts will continue and foreclosure will proceed against the property.