Could my personal assets be taken if I file for bankruptcy protection for my small business

The community bank will have the option to foreclose on the house, but it would take the house subject to the already existing first mortgage. Most likely, upon learning of the community bank's intent to foreclse, the mortgage lender would begin foreclosure proceedings also. This ultimately would result in a foreclosure sale by auction. At the auction, the mortgage lender would likely "bid" an amount equal to the amount owed on the first mortgage. If no one else bids, then the mortgage lender will become the owner of the house, the community bank's lien against the house will end, and you will no longer owe anything to the mortgage lender.

You would, however, still owe the community bank, and they may attempt to file a lawsuit against you if you personally guaranteed your business' loan.