1st mtg/2nd mtg/ securities

What is the name of your state? PA, but in process of moving to Florida

I have a property is PA, with a first mtg of 80k, 2nd mtg of 120k and a value of 135k. When lending the money -- the 2nd mtg bank did not require payoff of first mtg and cut me a check, which I deposited money in their checking and securities. A month or so later -- they froze all the accounts. This caused me to run into contractor problems (and many other issues), since this was money that was earmarked for home improvements, and under contract. I have fought to regain my financial position, but I cannot -- and I am entering into foreclosure with my first leinholder, and I'm wondering if I file for BK would that release the 2nd lein, and could I still keep the property? Is it better to maintain my residency in PA, or continue to move to Florida where I have a strong offer of employment?

Thank you!

Tom