Legal Question in Bankruptcy in California

If your house is collateral for the loan that means the SBA has a deed of trust against your property. That deed of trust is not affected by the Chapter 7 case since it is a secured debt. Therefore, if you do not pay the SBA then it can foreclose when your bankruptcy case is over or before if the SBA asks the bankruptcy court for permission to foreclose ("relief of stay"). If you are paying the bank (first deed of trust) but not the SBA (second deed of trust) then the SBA will foreclose for non-payment sooner or later. Your personal debt to the SBA will be discharged but the lien (deed of trust) will not be affected by your bankruptcy case. In other words, the only way the SBA can collect is by foreclosing and having your house sold.