Hi MNTtwinsfan,
A Bankruptcy Chapter 7 will not eliminate the debt, I've only seen that happen in Chapter 13's where the bankruptcy attorney actually included the loan (sometimes they tend to forget). The lien holder still has the ability to collect and I have had one recently that came very, very close to foreclosing. I was able to show the lien holder (in this case it was one called Linnear Mortgage, usually it's RTR or SLS) that we were almost ready to close and she removed the home from the auction, we closed the loan and satisfied the lien holder in full.
Right now many people have equity in their homes which is why you're seeing these 2nd lien holders become more proactive at finding ways to get their money back (usually plus interest). If you have any questions about satisfying the 2nd lien through a traditional refinance I'm happy to answer any questions you may have.