0 Spend

will our personal debt be dissolved or just moved along with the new currency and world gov etc.?

It has already happened, which is why the recovery is taking so long. This is a "balance sheet" recession.
http://www.voxeu.org/index.php?q=node/3065
http://delong.typepad.com/sdj/2010/08/first-draft-of-september-8-principles-of-economics-lecture-financial-markets-and-depression-economics.html

So we’ve seen what happens:

A. People abandon their homes because they can’t afford the mortgages.

B. People renege on their other debts: credit cards, etc.

etc. Those who have jobs pay off the debt they can,
http://blogs.wsj.com/economics/2010/07/08/consumer-borrowing-dropped-again-in-may/
but most of the decline in outstanding personal debt has been defaults:
http://www.federalreserve.gov/releases/g19/current/default.htm
http://www.housingwire.com/2011/01/19/household-debt-decreased-in-2010-due-in-part-to-default
and it has been this was since the recession began:
http://www.reuters.com/article/2008/07/23/idUS160626+23-Jul-2008+BW20080723

Of course, this has hurt the small banks (those that didn’t get federal rescue money) a great deal:
How The Bailouts Hurt Small Banks and Benefited Big Finance.

And the result is nasty (and self defeating) for all
http://krugman.blogs.nytimes.com/2009/01/30/damnification/