You may have gotten bad advice. There is case law in the 9th circuit that your exemption is frozen as of the petition date but that any appreciation in the value of an asset inures to the benefit of your bankruptcy estate. You would not be able to dismiss a chapter 7 case if there are going to be assets, and a chapter 7 trustee could very well sit on the case for years waiting for the house to appreciate to the point where selling it would be worthwhile.
If you have sufficient retirement money to pay the claims of your creditors, then even if it turns out that there are non-exempt assets, you will be able to "buy out your equity" from the Trustee by paying him the amount of that non-exempt equity (up to the amount of the claims). He will not take your house. And you can probably negotiate even less than that amount since you will be saving him/her administration costs of sale, etc.
Before you spend another dime of your retirement money (which is exempt from creditors in a bankruptcy), consult with an experienced bankruptcy attorney in your area. Be prepared to pay for a full case review. The knowledgeable and caring volunteer attorneys of Avvo, like Mr. Whitaker and Mr. Oney, can provide accurate information about the law and legal procedures, but this forum is ill-suited to advising strategy in a particular case. To that end, we can say that a Chapter 7 filing is almost irrevocable. Too much is at stake in your case to expect anything more of Avvo. Put another way, if you are dying to spend your retirement money to resolve debt issues, spend it on the best legal advice available.
Best wishes for an outcome you can accept, and please remember to designate a best answer.
This answer is offered as a public service for general information only and may not be relied upon as legal advice.
If you have already filed a Chapter 7 the legal answer is NO. Chapter 7 bankruptcy is a one way street, however if your 341 hearing has not happened yet and you do not show up your trustee will request the court dismiss your case. This is not a good idea but it is a way to "stop a bankruptcy that has already started". If you have filed a Chapter 13 that can be voluntarily dismissed at any time. If you are in a Chapter 7 and the trustee is trying to sell your house you may want to consider converting to a Chapter 13 and repaying the creditors who file claims over time rather than liquidating your retirement funds (which are fully exempt if they stay in the retirement account.)