When it is said that in the Kundalini process that karma is being resolved the biggest part of that is the changes that naturally occur within the individual. Kundalini moves the sadhaka to a place of balance and ultimately to transcendence of the storylines of duality. The sadhaka is naturally guided toward right action. As a result, there is less karmic backlash. As realization begins the "do-er" which is the ego-mind becomes silent. When there is no do-er there is no karma. The Buddhists call it "nirvana" which means literally "to be blown out". Within realization one is blown out of suffering, out of samsara, out of karma by the realization that there is no "me", there is only THAT, only the universal consciousness.
If "bad karma" were to exist you would be able to know it by stepping back and looking at your actions and their associated outcomes. It isn't a great mystery.