@Soulfox -- You just had to go and mention bankruptcy, didn't you? That opens up a whole can of worms in terms of which liens are paid in full, which ones are not, etc. You are not going to get rid of tax liens or first mortgage liens, for example, but things get confusing when you move down the line.
That is precisely why credit scores are so important when it comes to handing out second mortgages or doing other things that secure a loan with a home. Someone with good credit is far less likely to go bankruptcy than someone with spotty credit.