Legal Question in Bankruptcy in California

In a chapter 7, you can keep your house if it does not have excess equity. A second mortgage can be stripped off, but only through a chapter 13 payment plan and only if the balance on the first mortgage exceeds the value of the home: otherwise that junior lien will remain. There is a rather complex scheme of exemption statutes designed to shield your assets in bankruptcy. Whether you can protect the life insurance avails depends upon other factors including your income and the extent of your other assets. Certainly do not proceed with filing a petition unless you've consulted with qualified counsel and are confident all your assets will be safe from liquidation under chapter 7.