Yes, it's normal for the bank to file to foreclose after a bankruptcy. They are not trying to be mean. The bank is using the foreclosure process to "clear" the title of of junk that may have accumulated during your ownership and bankruptcy. This is sometimes necessary, even though it is clear that you do not owe the bank any money.
The bank is not allowed to take a judgment against you or to even hint that you you owe the bank money. If they do, it's a violation of the bankruptcy court's order. You should see that in the the final order of distribution, after the sale, the bank does NOT take a money judgment against you. Check that part of the judgment carefully. Banks occasionally make mistakes. But this is easily corrected. Good luck.
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Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.
It is completely appropriate for your lender to go through the foreclosure process after your chapter 7 bankruptcy filing and inevitable as well. The surrender of the premises and inclusion of your home in the chapter 7 does not clear up title, but a foreclosure will.
Typically the bank needs to foreclose on the property since "surrendering" the property in Chapter 7 does NOT transfer the title, it only tells everyone that you do not intend to keep the property. The bank needs to follow the foreclosure process of your state to actually take title to the home if they did not get a deed in lieu of foreclosure. Many banks need to complete a foreclosure to get title free of any liens recorded after the bank's mortgage.
If you listed the bank as a creditor, received a Chapter 7 DIscharge and did not reaffirm the debt to the bank, then you should not be liable for any deficiency when the bank forecloses.