Does a bankruptcy case automatically remove liens (such as mortgages) against my property?
No, not at all. Secured creditors get extraordinary rights in a bankruptcy case. Bankruptcy may temporarily delay secured creditors, but most voluntary liens (such as those held by your mortgage bank and your car lender) have to be satisfied by either paying the creditor or surrendering the property to the creditor.
However, you have some opportunities to remove involuntary liens and a small category of voluntary liens.
You can remove involuntary liens (except for liens securing alimony or support obligations) and some voluntary liens on property that you could exempt. For these voluntary liens, you can only remove liens on certain household goods (for example, clothing, one radio, one television, one VCR), "tools of the trade" and professionally prescribed health aids (such as a wheelchair or a hearing aid).
If you file chapter 13, you have the additional ability to remove liens by completing payments under the plan. In some cases, the plan will reduce the amount that you must pay or change the time period over which you must pay the debt. In the case of homes and cars, the ability to change the payment terms is limited.