Many contractors before you have filed bankruptcy, I am not aware of any adverse affect on a contractor's license caused by a bankruptcy filing. I've personally filed cases for contractors in California with no issues, but every state may be slightly different as contractor's licenses are issued by the state. You should consult with a local bankruptcy attorney to work out the details, but your best bet is probably to file a chapter 13 to preserve the house. For chapter 13, you must have some income to work with so that you can propose a repayment plan for creditors. If you have some income, chapter 13 is probably the way to go, but in some cases, chapter 7 is better. It depends on income and a few other factors. Good luck.
No. The Bankruptcy Code specifically prohibits this in section 525(a). I have filed bankruptcy cases for many contractors, real estate agents, and even lawyers. There has never been a problem with a former client's license (of any type).
As to what chapter you file, that really depends on the facts of your case. Sometimes you can choose 7 or 13. With other cases, you are required to do a 13 to get your discharge. I see you are in York county. I would recommend you contact Lee O'Steen or Showell Blades. Both are colleagues of mine and will give you excellent representation. Please tell them I referred you from Avvo.