A charge off or a bankruptcy discharge does not mean the lien is released. It usually is not. You might offer to settle with the second for a relatively low amount in exchange for a release, but from your post they are going to be due something as there is equity above the first,
In Illinois, based upon the law set by our Seventh Circuit, you cannot remove a lien through a chapter 7 bankruptcy case. Liens pass through bankruptcy unaffected. That means your personal liability for the second mortgage is discharged. The second mortgage company cannot collect it from you. However, the lien remains against the property. The charge off of the debt, does not remove the lien. You will need a real estate lawyer to negotiate a release of the second mortgage lien. You should look for someone that has some experience in negotiating releases. You will likely have to pay the second mortgage company for the release. I hope this works out for you and you can find the help you need to keep your home.
You need to either pay or settle with the second mortgage, period.
As already stated, the lien rides through the bankruptcy unaffected, so until you pay it (or settle it) the lien stays.
Approach whoever is servicing the 2nd mortgage and request a settlement. Many clients have seen settlements in the range of 5-15% of the balance due (paid in lump sum). Your mileage may vary depending on how upside the home's value.