It seems like a new banking system backed by something tangible again like how it was in the 1800's and prior would be a good move but would those of us in debt still be in debt to the banks? If not, how would our debts magically be absolved?

Example, say you owe money on your car and you have a ton of outstanding debt to a bank or credit lender. How exactly does implementing a new system of banking nullify this? Can't the bank still say "Since the USD is defunct, now you owe us the "New US Treasury Certificate" equivalent of that amount"?

I just can't quite put 2 and 2 together how the new currency would be debt free without older debts being absolved first.